Study On Economic Effect Of Performance Commitment In Backdoor Listing Of Zhenong Stock

In line with the reform of pharmaceutical circulation enterprises such as "two-ticket system" and "collection and acquisition system",many large commercial companies speed up the integration of the circulation market in various provinces,and choose the strongest company in the province as the platform to integrate local companies in the form of equity restructuring.Therefore,more and more pharmaceutical circulation enterprises choose to enter the A-share market by detour listing.Although a backdoor listing is the next best option to an IPO,it has become popular because of the low cost of financing and the short time it takes.In order to ease the disadvantages of the interests of minority shareholders caused by high valuations and information asymmetry,performance promises and compensation are often formulated in the process of restructuring transactions.Performance commitment can usually deliver good news to investors to facilitate the synergy of mergers and acquisitions,while compensation agreements can provide protection for minority shareholders and enhance investors’ confidence.At present,most of the literature is related to the influencing factors and results of achievement and performance commitment,while there are relatively few studies on performance commitment under the background of backdoor listing.By studying Zhenong Stock,this paper examines performance commitments based on backdoor listing and provides a reference for other companies to use.In this paper,literature research method,case analysis method,event study method and financial index analysis method are used to divide the economic effect into three parts:event day stock price,event day excess rate of return and financial index.The effect and mechanism of performance commitment influence on these three parts in backdoor listing are studied,which is helpful to provide reference for improving enterprise efficiency through rational use of performance commitment in practice.The specific analysis process of this paper is as follows: first,related theories are used to explain the application mechanism of backlisting and performance commitment,and then the case company and its motivation for backdoor listing are expounded,laying the foundation for subsequent analysis of the economic impact on companies.Secondly,it describes the process of signing and realizing backdoor listing and performance commitments.Then,the economic effects of backdoor listing and performance commitment were obtained from the stock price on event day,the excess rate of return on event day and financial indicators.Then,the reasons for the above economic effects were analyzed from the perspectives of synergistic effect,signal transmission and incentive and constraint effect.Finally,conclusions and enlightenments are drawn through the description and reason analysis of the above economic effects.The research shows that M&A performance commitment has a positive impact on economic results at least in the short term.The reason for the above influence of performance commitment is that it transmits positive signals about the future performance of the counterparties,indirectly promotes the generation of synergies and can exert the incentive and constraint effect.Therefore,since the positive impact of performance commitment on the economic effect of enterprises is short-term and cannot be sustained in the long run,enterprises need to pay more attention to the rationality of performance commitment and the setting of long-term performance goals as time goes by.