Equity Balance,institutional Investors And Private Placements Performance

Institutional investors are the main participants in the capital market.In recent years,the role of institutional investors in corporate governance has attracted extensive attention from scholars.On the other hand,private placement is the main equity financing in China,which plays an important role in helping companies supplement operating funds,integrate and allocate resources,and transform and upgrade.Institutional investors are also one of the main participants in private placement.So,do institutional investors play a monitoring role in the specific situation of private placements?Combined with Monitoring Effects Hypothesis and Managerial Entrenchment Hypothesis,this dissertation explores the impact of institutional investors on private placement performance.At the same time,from the perspective of internal corporate governance,this dissertation discusses the role of equity balance.It studies the following two questions:(1)the effect of institutional investors and their characteristic on the performance of private placement;(2)the moderating role of equity balance in institutional investors and private placement performance.Based on the research issues,this dissertation takes A-share listed companies that implemented private placement between 2006 and 2017 as research samples,and analyzes through empirical regression.The conclusions include the following parts:(1)Institutional investors has a significant negative impact on both the issuing companies' short-term stock returns and long-term operating performance.That is,it is inconsistent with Monitoring Effects Hypothesis.Institutional investors participating in private placement are passive shareholders and do not play an active role or increase the value of the company.(2)Heterogeneity exists among institutional investors.In terms of shareholding period,there is no significant relationship between strategic investors and the performance of private placement,while financial investors are negatively correlated with the performance of private placement.In terms of shareholding independence,non-independent institutional investors have an irregular relationship with short-term stock returns and have a negative impact on long-term operating performance,while funds and investment companies are negatively correlated with both shortterm returns and long-term operating performance.In terms of the nature of shareholding,state-owned institutional investors have a positive impact on short-term stock returns,but they have an irregular relationship with long-term operating performance.(3)Equity balance does not affect the relationship between institutional investors and short-term stock returns.But the degree of equity balance moderates the relationship between institutional investors' subscription ratio and private placement.The higher the degree of equity balance,the less negative effect institutional investors have on the company's operating performance,that is,equity balance can play a positive governance role.