Empirical Research On The Impact Of Private Placement On Listed Companies' Performance

Private placement is a non-public offering of stock behavior of a listed company,which raises funds through the issue of shares to a few specific objects(not more than 10).In May 2006 China Securities Regulatory Commission promulgated the Administrative Measures for the issuance of securities of listed companies,that makes private placement officially became a way of refinancing of listed companies and also let private placement become popular.Private placement is popular in listed companies because of its simple issuance procedure and low cost.From theory,when we put high quality assets t into the listed company,they can rise the efficiency of idle assets,and achieve economies of scale,and improve the company's profit ability,operation ability and so on.But in the actual life,the big shareholders often occupy small and medium-sized shareholders.In our country,the agent problem in private practice and benefit expropriation behavior in listed companies become attention-getting.the author use Empirical research to make sure if private placement and the different objects will impact on listed companies' performance.Based on the asymmetric information hypothesis,the principal-agent theory,supervision effect hypothesis,defensive hypothesis as the theoretical basis for empirical research,placement can improve the operating performance of listed companies.So this article puts forward three hypotheses before the empirical analysis.after private placement,listed companies operating performance will improve after the issuance.When the object is the institutional investor,listed companies' performance will improve after the issuance.For those whose objects only contain big shareholders,their performance will improve.Based on the listed companies in China of which had Private placement in 2012,as the research sample,finally got 138 valid samples.The focus of this article is the performance of listed companies,so there is no study of market performance.And the panel data model is established for empirical research.In this paper,ROE is used as the independent variable,and the size of the private placement and the two private placement objects are the dependent variables.In addition,the paper also adopts the assets scale of the listed companies and the asset-liability ratio of the previous year as the control variables.After got the two different results of two different panel models,this article compare the two results.Then the reasons are explained.at last.Finally the result is: the private placement scale causes negative effect to the operating performance of listed companies,participation of major shareholders will bring negative effects to the operating performance of listed companies,participation of institutional investors will improve the business performance of listed companies.In the last of paper,the reasons for these three phenomena are illustrated.