Research On The Market Effect And Motivation Of The Senior Executives' Increasing Holding Of The Listed Companies

Since the equity division reform,the insider's transaction behavior has been presented with a trend of normalization and diversification,and has been highly valued by the regulatory authorities and the capital market.Because senior executives have a crucial influence on the operation of the company,in recent years,the transaction behavior of senior executives has become a hot topic and a focus for scholars.In particular,as the domestic capital market experienced a continuous fall in June 2015 and the 2016 downturn continued,the regulators encouraged and supported insiders to increase their stakes in the company through various measures and channels.As the 2017 market gradually recovered rationally,there are more and more behaviors for listed company senior executives to increase their shareholdings in the company's stock.However,the capital market's understanding of this behavior is not the same.Some people think that senior executives' behaviors of holdings are based on maximizing their own interests,and rational trading behaviors are made due to undervaluation of stock prices.Some people think that senior executives increase their holdings from the perspective of bailout.It is short-term operation.At present,there are still not many studies on senior executives' holdings,so the purpose of this article is to further study the market effects and motivations of senior executives' holdings.This thesis uses the behavior of senior executive increase their holdings in 2017 as the research object.Based on theoretical analysis of signal transmission theory,market timing hypothesis,and insider trading,this paper uses event research to study the market effect generated by executives' holdings,and further analysis of the market effect of the increased holdings of executives of different proportions and property rights.Due to different incentives for executives to increase their holdings,the market effects of executive holdings are also different.Therefore,this paper deeply analyzes the incentives of the senior executives of state-owned and non-state-owned enterprises to increase their holdings in order to better understand the deep-seated factors that influence market effects.The results of the study show that senior executives' holdings can produce positive and significant excess returns,which has a boosting effect on stock prices.Among them,a large proportion of executives' holdings has a stronger market effect than a small percentage of holdings.Non-state-owned executives have more information than state-owned enterprises,and the impact on the market is also stronger.When the stock price of non-state-owned enterprises is underestimated,the greater the degree of underestimation,the greater the possibility of executives holding up;when the stock price of state-owned enterprises is underestimated,the degree of underestimation is irrelevant to whether senior executives increase their holdings.This study not only enriches the research perspective of senior executives' holdings,but also provides empirical evidence of market effects and motives.It also provides suggestions for the relevant departments to strictly and regulate the behavior of senior executives to increase their holdings.