An Empirical Study On The Determinants And Performances Of The Placard Events In A-share Market

Since 2014,there has been a wave of placards in the A-share market,and the placard effect has attracted much attention.Listed companies' placard announcements are often understood by the market as a kind of positive information,which leads to investors' eager desire and rising stock prices.Some of the placard incidents were developed for the sake of control rights.Some people think that these external parties are "demons that stir up troubles",and "pests that harm people".Relative to the industry,the academic community has paid insufficient attention to placards and has not conducted a thorough study of the causation of placards.Are placards troubles made by "demons" and "pests",or substantial good news for listed companies?This article reviews the theoretical and empirical researches on the market for corporate control at home and abroad.And it empirically analyzes the determinants,abnormal return and impacts on the performance of target companies of placards during the period of 2010-2016,in an attempt to supplement domestic evidence of relevant research.First of all,this paper empirically finds that the A-share market placard targets possess below characteristics:poor operating performance,high degree of undervaluation of the stock price,poor growth,small scale,state-ownership,high degree of equity balance and low degree of equity concentration and higher debt ratios.The act of placard may be based on the disciplinary mechanism of the market for corporate control,namely,the acquisition of the right to improve the management of the company,or the value discovery of the undervalued stock.Secondly,through the event study method this article finds out that:in general,during the event window(-10,10),placard events can produce average cumulative abnormal returns of about 5%.Industrial-capital-led placard events cannot produce significant average cumulative abnormal returns,while financial-capital-led placard events can produce significant average cumulative abnormal returns of 6.55%.Grouping on the intentions to continue to increase holdings disclosed in the placard announcements,it is found that the average cumulative abnormal returns of placards of the "to be increased" group and the "uncertain" group are significantly positive,and the average cumulative abnormal returns of the "to be increased"group(6.88%)was higher than the "uncertain" group(4.42%);the "remain unchanged" group's average cumulative abnormal returns did not pass the T-test.Finally,the median rank sum test and the average treatment effect test under the propensity score matching method all show that the placard incident has no significant impact on the target company's operating performance——although not helpful,they are not "pests".