Study On Perspective Of Political Connection,Subscription Of Large Shareholders And The Company Operation In The Period Of Private Placement

The way of equity refinancing in China mainly includes public issuance,rights issue,issuing convertible bonds and so on,but conditions restrict companies to use them.In 2006,“Management methods of securities issuance of listed companies” has confirmed the private placement as the new method of SEO,because of little condition and low threshold,companies pay more attention to this method.Now,the study about this method mainly focuses on the discount of price,Short term stock price and performance;but how factors impact the earnings management,the performance and true performance in the time of private placement,These questions have no answer so far,but resolving these questions are good for us to handle the real fact of company performance in this time.Based on the theory of supervision,the theory of agency cost,the theory of information asymmetry and the theory of signal transmission,in order to research the questions,we choose the companies who have private placement between 2007 and 2014 to explore how different factors—political connection and the subscription of large shareholders—influence the earnings management during the period of private placement,and base on this,explore how this factors influence the performance and true performance.The following are results:(1)As time goes by,more and more companies choose this method to refinancing,companies have already accept this method.(2)During the period of private placement,political connection and the subscription of large shareholders have different effect to earnings management: political connection tends companies to use real earnings management,the subscription of large shareholders tends companies to use accrued earnings management.(3)During the period of private placement,both factors are good to company's performance,but this result is illusion because of earnings management.To true performance,different factor has different impact,the reason is different factor make company tend to different earnings management.(4)Private placement might be bad for performance of company in indirect way.The innovation of this paper is following:(1)this study expands the period used by original literature study,help for stability and expansion of the original study.(2)This paper researched what effect that different factor influence the earnings management in period of private placement;this study offer a new vision studying the earnings management in the period of private placement.(3)This study expand the mean of true performance,and introduce it into the research of private placement.In addition,through the different way of earnings management to further explore the true performance of the company,it may provide a new way of thinking for the study of directional increase.This study will be helpful to the private placement research field,especially it will be helpful to the study of earnings management and performance of company in the research field of private placement;In addition,This study also enlightens and expands the idea for company's behavior that use private placement,the supervision of the regulatory agency and the investment of investors.