The Impact Of Increasing Shareholdings By Major Shareholders On Stock Price

The behavior of large shareholders has always been the focus of many scholars.Before the share-splitting reform,the listed company's equity is divided into social public shares and state shares,corporate shares,the former can be traded in the secondary market,the latter dominant in the company's share capital is not negotiable,and its interests are not affected by the secondary market share price fluctuations.After the split share reform was completed,listed companies share the same rights,state shares and corporate shares can also be listed in circulation,major shareholders began to pay attention to share market value.When the stock price fall in abnormal,lower than the major shareholders and management expectations,major shareholders began to try to effect share market value through many ways.In particular,the behavior of large shareholders and management increasing their shareholding in the secondary market implied that the share price is just good to be invested,so it became the wind vane of the vast external investors,and also the most widely and direct way of affecting the stock prices.However,it is very important to study the effect on the stock price of large shareholder's increasing shareholding by the whole industry and the whole circulation angle of view,with the new data,whether the real effect on the stock price and the degree of the impact are all concerned by the scholars and investors.This paper first reviews the relevant literature review and institutional background,on this basis,further analysis of the large shareholders' increasing shareholding behavior.Taking the pharmaceutical industry as the representative,12 listed companies in four sub-industries,namely,chemical pharmaceutical industry,traditional Chinese medicine industry,medical equipment industry and biological pharmaceutical industry,were selected as the research objects.Taking their 10-year growth proportion of major shareholders and financial data from the year 2008 to 2017 as the research samples,the paper empirically tests whether the increasing behavior of large shareholders has a positive impact on the company's stock price.In order to study and analyze the correlation between the abnormal returns of listed companies and the proportion of large shareholders in increasing shareholdings,this paper constructs a multiple regression model.Through the empirical analysis,the results show that:The first,the higher the increasing proportion of controlling shareholders increasing,the higher the abnormal return of stock price.Secondly,the increasing proportion of the top five shareholders is positively correlated with the abnormal returns of stock prices.Thirdly,the higher the increasing proportion of the top ten shareholders,the higher the abnormal return of stock price.At the same time,after the increasing of large shareholders,the impact of the company's size,profitability and development ability on the abnormal returns of stock prices is studied.Because of the differences of the large shareholders' nature and the behavior of increasing their holdings,this will lead to different influences on the stock price in the market.The conclusion of this paper can be given a certain reference to the market investors,the major shareholders of the listed companies and the market regulators.