Research On China Stock Return:Causes,Paths And Economic Consequences

In the 1990s,the domestic capital market could not meet the development needs of some domestic companies,so some companies chose to list on overseas capital market.However,as the Chinese stock companies are caught in the crisis of integrity due to suspected financial fraud and irregular information disclosure,they are short-selled by foreign institutions.Due to information asymmetry,the misunderstanding of the development model of the foreign capital market and the disapproval of the strategic decision-making caused the stock price of the Chinese stocks to be undervalued,and the strategic development was not recognized.With the rapid improvement of the domestic capital market and the continuous implementation of relevant favorable regulations,lots of mainland companies chosen to exit from overseas capital market,seeking to return to the domestic capital market.The topic of China stock return has attracted attention in the domestic capital market.In this context,based on the previous studies,this paper takes the Chinese stock company WuXi Pharma Tech as an example to discuss the three aspects of return motivation,regression path and economic consequences.The return of WuXi Pharma Tech is mainly due to factors such as long-term undervaluation of stock prices,unrecognized strategic development,reduced agency costs,and evasion of supervision to reduce maintenance costs.In addition,WuXi Pharma Tech's regression path is different from the previous stock return path.This paper analyzes its innovations while introducing its regression path,and provides new ideas for the Chinese companies that intend to return.Finally,this paper analyzes the market performance of the company's spin-off and returns,and analyzes the economic consequences of the return of WuXi Pharma Tech from the aspects of financing,investment and operation.This article wants to offer new ideas for the prospective returning stock companies by the analyzing WuXi Pharma Tech's return,and hopes to give implications for regulators and investors.