Analysis Of The Impact And Reasons Of Convertible Debt Financing On The Performance Of Listed Companies

In recent years,with the strict supervision of the directional issuance market,the convertible bond market has gradually become prosperous since2017.Because of its dual attributes of both equity and creditor's rights,the SFC has constantly introduced new policies to encourage the development of the convertible bond market.This paper mainly studies how the issuance of convertible bonds affects the market performance of listed companies and explores the reasons behind the impact.Based on the new changes in the convertible bond market in 2017,the impact of the issuance of convertible bonds in 2017 on the performance of listed companies and the corresponding reasons have changed.Firstly,this paper uses Wilcoxon rank sum test to test the fluctuation of operating performance of Listed Companies in the two years before and after issuing convertible bonds.The indicators to measure operating performance include ROE,EPS,operating cash flow per share,net operating interest rate and so on.At the same time,this paper selects the control group for the sample group according to the industry,BM value,book-to-market ratio and other dimensions.Empirically,this paper regards the change of ROE of listed companies as an alternative variable of operating performance fluctuation,chooses the alternative variable of earnings management by modifying the traditional Jones model,and regressions the change of ROE with the variables of working capital turnover,equity concentration,convertible bond financing scale,relevant protective clauses,earnings management,etc.to explore the impact of performance fluctuation of listed companies.The results of this study show that:(1)From 2010 to 2016,after issuing convertible bonds,the operating performance of listed companies declined significantly in varying degrees,and the above performance reached its peak at the end of the year before issuing bonds or in the year when issuing bonds.Compared with the control group,some financial indicators also showed significant differences.However,the overall financial data of listed companies'bond issuance samples in 2017 are relatively stable,and there is no significant difference between them.(2)The bigger the earnings management behavior of the issuer in the previous year or current period,the lower the ratio of assets to liabilities,the faster the turnover rate of working capital,the greater the fluctuation of cash flow in operating activities,and the higher the concentration of equity,the better the performance of listed companies will be.At the same time,earnings management behavior in the previous year will reduce the performance of listed companies,and the change of the company's operating performance in the previous year will generally change in the same direction as the change of the company's operating performance in the current year.(3)With the prosperity and development of the convertible bond market in 2017,the earnings motivation of listed companies to issue convertible bonds has weakened.The fluctuation range of market performance before and after issuing convertible bonds has been significantly reduced compared with previous years.The reasons are mainly from the macro point of view,the relaxation of policy,the reduction of issuing conditions and the gradual return of market to the rational results of convertible bonds.