Research On The Influence Of Private Equity On Business Performance Of Listed Companies

Along with the development of the international capital market, the creation of many innovative capital model and process has been promoted. Private equity, an innovative investment activity in the capital market in China, plays an important role in improving the corporate governance mechanism and strengthening the company's core value creation ability. It receives extensive attention from the government and investors.Theoretically, the private equity can be involved in the operation and management of the invested company, thus to affect the company's business performance. In order to explore its specific effect, this research selects data of the listed company from gem between the time it set up to 2014 as the research object. The focus is to explore the impact of private equity on the operating performance of listed companies. From the perspective of private equity characteristics, this research further studies its impact on the company business performance. Moreover, it carries the comprehensive comparative study concerning the company's long-term operating performance after the company has been listed. The empirical results find that the business performance is generally higher when the private equity is involved in the listed company. The shareholding ratio of private equity, its reputation and foreign background is positively related with the company's operating performance. The number of joint investment of private equity has no significant impact on company's performance. Moreover, when there is private equity involved, the long-term operating business performance of listed companies is generally better than other listed companies which have no private equity. This kind of listed companies(private equity involved) appear weaker decline degree than other listed companies(no private equity involved). Finally, this research puts forward policy suggestions from the perspectives of private equity investment institutions, the management of the company as well as the government and other regulatory authorities.