The Impact Of Listed Companies' Violations On Stock Prices And Refinancing

By the end of February 26,2020,the number of listed companies in China's stock market has reached 3,812,having rapid growth in number.At the same time,due to the ever-increasing financial deleveraging environment and increasingly stringent regulations,violations of laws and regulations by listed companies are more likely to surface,and the number of violations and companies has increased year after year and reached a peak in 2018.In 2018,the number of violations reported by the regulator reached 1113,which is approximately equal to the total of violations from 2012 to 2015.The number of violating companies reached 622,which is approximately equal to the total number of violating companies from 2013 to 2015.The violations of listed companies will not only damage the corporate image,affect investor confidence,take pressure to stock prices,and bring direct investment losses to small investors,but also increase the credit risk of listed companies,increase financing difficulty,and affect their subsequent refinancing behavior.The research perspectives of the existing literature are mainly focused on the causes of listed companies' violations and the impact of short-term stock prices,and there are only few studies on the effect of violations on mid and long-term stock prices.Regarding the economic consequences of violations,the existing research mainly focuses on the impact of violations on debt financing.There is not any study on the effect of violations on the refinancing behaviors of listed companies such as additional issuance,rights issue,and issuance of convertible bonds.Therefore,this article aims to study the impact of violations on the mid and long-term stock prices and refinancing of listed companies,and explore the mechanism of violations on mid and long-term stock prices and refinancing,thereby enriching the research literature in this field.This article firstly makes a statistical analysis of the basic situation of violations of listed companies in the four years from 2016 to 2019,from the overall situation of violations,violation types,punishment methods,and processing department to carry out classification and statistical analysis of violation information,from industry characteristics,scale characteristics,financial characteristics,market transaction characteristics,corporate governance characteristic to analysis the characteristics of violating companiesThen extracts the significant factors as the control variables of the regression analysis,and it was found that the violation had a significant impact on the short-term stock price.At the same time,the two indicators of the property right(Owner)and the age of establishment(Age)were grouped.Next,the PSM method is used to pair out the violating companies and non-violating companies with similar control variable eigenvalues.A regression equation is constructed by the violating behavior and the control variables to study the impact of the violating behavior on mid-and long-term stock prices and refinancing.Empirical testing found that violations have a significant impact on the mid-to long-term stock price at 10%.The impact of violations on refinancing is even more significant.Empirical testing found that violations have a significant impact on the scale of refinancing at 1%.Using the times of refinancing as an alternative indicator,the robustness test has also been passed.At the same time,it was found that the four control variables of company size,asset-liability ratio,nature of property rights and listed years also had a significant impact on refinancing.