Research On Financing Efficiency Of Private Placement Of Listed Companies In China Based On DEA Model

After the official promulgation of the "Administrative Measures for the Issuance of Securities by Listed Companies" in May 8,2006,private placement became a preferred financing way of listing Corporation with the advantages of low threshold,less restrictive conditions and simple approval process and low cost.Following the 2013 IPO moratorium triggering a "Private placement upsurge",State-owned enterprises reforming,merger,acquisition and reorganization among enterprises triggered a new round of upsurge in the year of 2014 and 2015.According to the statistics of WIND financial terminal,in this two years,477 and 930 listed companies have been successful placement.And private placement financing scale exceeded one trillion for the first time.Private placement has become one of the focus of the society and the academic community.In addition,there is a significant industry difference in private placement.Total funds raised by the manufacturing sector accounted for as high as 46.76%,The manufacturing industry companies accounted for 60.91%in the implementation of the private placement of listed companies.Whether in the financing size or the number of companies manufacturing industry has an absolute advantage.This paper takes the manufacturing industry as an example to study the financing efficiency of private placement.Previous research on the long-term performance of private placement shows that,scholars evaluated the financing efficiency of private placement from the three aspects:announcement effect,cumulative average abnormal return and operating performance.The evaluation method generally used event study and multiple regression analysis.But at present chinese securities market is in the stage of weak efficient market,the stock market does not fully reflect the operating performance of the enterprise,And when implementing private placement,listed companies may have earnings management or other acts eventually led to lower the cumulative abnormal return rate which is used by the event study method,so only using event study method as the research method of financing efficiency is one-sided.And the principle of multiple regression analysis is to determine the level of corporate refinancing efficiency by building a multiple linear regression equation for the long-term cumulative abnormal returns or a set of corporate financial indicators,at the same time,we can determine who impact efficiency and the extent of the impact.But the premise of the multiple regression analysis is that the factors which influence the efficiency of financing and the index of financing efficiency are the linear relationship.Obviously,it is difficult to prove that there must be a linear relationship between them.As a result of the evaluation index and method of private placement financing,there is no consistent conclusion.Based on the research of existing scholars,this paper proposes a method propose a model based on PCA and DEA to measure the financing efficiency of private placement.In this paper,we use Chinese A-share listed companies which have implemented private placement in 2010 to 2012 as the samples.The Paper selected the discount rate,the past year’s asset liability ratio,the relative size,the size of the company as well as Tobin’Q value as input index,choosing long term cumulative abnormal return,earnings per share,reflecting the company’s profitability,growth ability,operation ability,solvency and cash flow situation as output index,in which the financial indicators to take the average value of private placement year,year after year,and two years after year.First,this paper uses principal component analysis to sum up the 15 output index into 7 principal components with a certain economic meaning,Then use the DEA model to evaluate the relative efficiency of the research samples,and finally analyze and improve the invalid samples.The main conclusions of this paper and innovation are as follow:(1)chinese manufacturing listed companies financing efficiency appears still lowly,only 20.14%of the samples were valid for DEA,49.64%of the sample is effective as well as 78.78%of the sample is in the stage of diminishing returns to scale.(2)Optimality of DEA model,the DEA model uses the input and output data of all the samples to establish the production possibility set,and then find the best samples from the same sample unit,The efficiency of each decision making unit is sorted,and the invalid samples can be analyzed according to the sample set,and putting forward the improvement suggestions.(3)Follow the principle of combining market indicators and financial indicators to evaluate the efficiency of private placement financing of listed companies,overcome the lack of Research Indicators,at the same time,this paper uses the average value of the three years of financial indicators,to avoid the impact of a certain index value anomaly.(4)By using principal component analysis method,the output index is divided into 7 principal components with clear economic meaning,and avoiding the defect of subjective weighting.