Participants,Purposes And Timing Behavior Of Private Placements

After the reform of non-tradable shares,rights in Chinese securities market gradually disappeared,meanwhile supplemented issuance of new equity replaced.With 2006 "management of listed companies to issue securities",2007 "the listed company non-public offering of stock implementation rules" and other laws and regulations issued,private placement has become the main way of equity financing in the capital market of China.Compared with other equity refinancing methods,listed companies choose private placement because of its profitability and dividend payment system.Private placement not only can raise cash for listed companies,it can also achieve the overall listing,mergers and acquisitions,asset injection by controlling shareholders,the introduction of strategic investors as well.So private placement is of great significance for the further development of Chinese capital market.When listed companies carry out a private placement plan announcement,it means that private placement officially kick off.This announcement is not only the beginning,but also indicates that the future pattern and trend of beneficial game.The existed literatures have been deeply discussed in the aspects of private placement announcement effect,benefit transfer and earnings management.Although the vast majority of studies have considered the importance of large shareholders in the process of private placement,the current researches have not discussed the impact of timing behavior when major shareholders participate in the issuance of private placement.Based on these,this paper discusses the impact of major shareholders' participation on the timing behavior of private placement for different purpose,and further analyses the effect of the proportion of large shareholders on the timing behavior.In this paper,we examine the relationship between participants,purposes and timing behavior of private placements listed in Shanghai and Shenzhen Securities Exchange over 2006-2015.The results show that:(1)more timing behavior in private placements when controlling shareholders take part in the placements.(2)more timing behavior and lower prices in private placements aiming at project financing.(3)less timing behavior when controlling shareholders subscribed more new stock in private placements.(4)more timing behavior when controlling shareholders subscribed with cash.