The Impact Of Private Equity Investment On The Information Technology Listed Companies In China

Private Equity is funding invested enterprises to obtain the appropriate equity in return, helping the development of the enterprise by providing value-added services or other ways, and obtaining profits through the sale of shares in the future. The prosperity of Private Equity industry, directly contributes to the innovations and developments of global science and technology. Chinese Private Equity industry is developing rapidly, especially under the current circumstance of "public entrepreneurship and innovation" and "Internet+" vigorously promoted by government, Private Equity will play an important role in promoting industrial transformation and upgrading.To study the influences of Private Equity investment on Chinese information technology industry listed companies' value, a review of related literatures was firstly conducted; secondly, theories about Private Equity investments and company value were summarized; then, detailed qualitative and quantitative analyses were made about the status quo of Private Equity industries' development, as well as its investments in information technology industry, at last, selecting 363 IT companies which listed on the Shanghai and Shenzhen from 2010 to 2014 as research subjects, through multiple linear regression, we analyzed Private Equity investments' impacts on the value of listed companies and its governance structure, and conclusions based on the results were proposed.The main conclusions are as follows:In terms of investment amount or the number of cases over the years, the IT industry has always been a hot area of Private Equity investment, However, the amount of single investment continue to fall, the investment style showed an early trend. For unlisted IT companies, the involvement of Private Equity can solve their financing problems, at the same time, it would also provide more value-added services. For the listed companies of IT industry, the Private Equity's holding proportion is negatively correlated with the company value. Private Equity investments will change the company's governance structure to a certain extent, the involvement of Private Equity can reduce the concentration of ownership, improve the company's equity balance system and expand the size of the board.