The Research Of Economic Consequences Of Executives' Selling In Listed Companies

The reduction of holding stocks of the executives refers to action of selling shares in the secondary market.In the Western-developed capital markets,it is the common phenomenon.When the appropriation of number of transactions is over certain fixed number,it is needed to disclose relevant information.While,compared with the Western countries,the holding stocks of the executives in our country reduced late,and for the Non-tradable Share Reform,executives or big shareholders in listed companies can not exchange the shares in the secondary market.Normally,Net assets is used to evaluate their treasure which is also the standard of prices when executives and big shareholders transfer shares.This is the direct cause of the fact that the executives or the owners of the listed companies do not pay much attention to the prices of shares,since it is seems that the treasures of the big shareholders and the executives is not related to the share prices.However,since the reform of non-tradable shares,shares of big share holders and the executives can gradually exchange in the secondary market,and share prices are related to their treasures which also become their core goals of pursing benefits,namely,their way of acquiring benefits changes a lot.Until then,the reduction of holding stocks of the executives in the capital market becomes the focus of public.Firstly,by carding and review of the literature,executives selling in listed companies on China's A-shares in Shanghai and Shenzhen the main market is done to do statistical analysis and discussion,and,initially,the research subjects is got;Secondly,based on the economic consequences of theory,market timing theory,principal-agent theory and signaling theory,defining the basic concepts such as reduction of executives and institutional background,the phenomenon of executives selling on China's A-shares market is researched from the perspective of both shor and long term financial performance,putting forward the presumptions of this paper;Third,after selection of samples and variables,event study and paired samples t-test are used to test the hypothesis and concludes that the results of executives selling pass investors bearish signal to the market,with falling share prices,so as to have a negative short-term market reaction;and,before and after the phenomenon of executives selling,long-term financial performance of the company has a significant downward trend;In addition,combining the space of motherboard market,we will draw conclusions and put forward feasible and constructive suggestions.Therefore,the paper,six chapters,based on the logic path analysis of the "ask a question","analysis a question" and "problem solving",is analyzed.By following this line of thought,we get the thinking processes "from theory to practice" to "back from practice to theory".