An Empirical Study On The Impact Of ST-Cap On Corporate Value And Business Performance

Special treatment(ST)system which is unique to China's stock market is a special system.Listed companies will be implemented ST because of financial difficulties and other abnormal conditions.The establishment of the ST system is to monitor and standardize the behavior of listed companies and protect the interests of investors,so as to maintain the stability and healthy development of the securities market.ST system not only has the role of early warning,but also a sign of financial distress.Delisting risk and financial distress will have a negative impact on listed companies.Financial distress will encourage enterprises to take some positive management behavior to improve business performance.In the face of this phenomenon,this paper hopes to study the impact of the ST system on the listed companies based on the value of the company and the performance of the business,whether the system is effective,and whether it is worth the company through the earnings management to take the initiative to wear.Corporate value and business performance are hot topics in the study of corporate finance and are the explanatory variables of interest in this article.In this paper,the stock market in China as the research object,the company's financial theory as the basis,to explore the relationship of ST system on corporate value and business performance.This paper employs propensity score matching and difference-in-differences model to examine the causal effect of ST system on firm value and operating performance.using the sample of non-financial A-share listed companies from 2004 to 2014,this paper finds that ST can significantly improve firm value prior to propensity score matching.But after propensity score matching,that is,controlling for other factors such as some characteristics of the companies,ST itself does not improve firm value.Specifically,ST not only reduces the book value of assets,but also reduces the market value of assets,which shows that the ST system plays a role in risk pre-warning,and investors are not blind in pursuit of ST shares.In addition,ST can also warn the companies' executives so as to significantly improve the companies' future operating performance.These empirical results suggest that ST system,which is a beneficial attempt in line with the China's facts,has played an expected role in the stock market.