China's Securities Market Financing Efficiency Empirical Research

The emergence and development of China's securities market provides enterprises with an important channel of direct financing. Seeing from the development of enterprise financing, securities market plays a more and more important role on satisfying enterprise financial demand and optimizing allocation of resources. Securities market is the external environment of direct financing activities, all kinds of institutional arrangement on direct financing is software of the environment, investors and enterprises are buyers and sellers of capital market, whereas government is the provider of system and the supervisor and arbitrator of transactions. The financial efficiency of securities market depends on the power and action directions of all parties.China's securities market was established under the circumstances of economic reform, and it is developed and perfected by continuously developing the old system and discarding the old one. The gradual development of China's economic reform leads to gradual institutional changes of the securities market. As a kind of institutional arrangement of direct financing, different institutional design may inspire different responses of all parties, break the initial equilibrium, and start a new round of dynamic game. The result of multilateral game will be the decline or enhancement in efficiency of direct financing. All kinds of endeavor and exploration to enhance the efficiency of securities market must be all-round, multi-angle and systematic.With China's securities market which is under institutional changes as background, efficiency of enterprise direct financing as the research theme, and authoritative theories of home and abroad as guidance, by referring to former research achievements, this paper summarizes notable factors affecting efficiency of direct financing and deeply analyzes the cause of formation of all factors and their mechanism on direct financial efficiency. This paper not only puts forward policy-related suggestions to improve efficiency of securities market so as to enhance efficiency of direct financing of China's securities market in the future, but also provides decision-making proof for building securities market with Chinese characteristics.Main points explored deeply are as follows: firstly, this paper systematically reviews literatures on financing efficiency, including existing theories on financing and financing efficiency within and outside China, theories on efficiency and financial efficiency, theories on financing efficiency and institutional change, and theories on behavioral finance, so as to lay theoretical basis for the paper; secondly, this paper makes empirical analysis of direct financing efficiency of China's securities market on the basis of current study of institutional changes of securities market and enterprise direct financing; thirdly, with empirical analysis under consideration, this paper deeply analyzes factors that influence efficiency of direct financing from five different angles, that is, system of securities market, corporate governance structure, microstructure of securities market, behavioral characteristics of investors, and government behavior; lastly, this paper summarizes foregoing parts and provides policy-related suggestions on enhancing financing efficiency of securities market and perfecting securities market.The conclusions of this paper are: the issuing market, which is the beginning to develop China's capital market, is far from weak-form efficient market, and our current issuing system, issuing method, and pricing methods are highly correlative to the efficiency of direct financing and influence behavior of direct financing significantly. Meanwhile, the performance of direct financing is also badly influenced by imperfect conditions of corporate governance structure, unreasonable microstructure of secondary market, irrational investment due to low quality of investors, and government intervention. It is a kind of system engineering to perfect the system of securities market, to deepen reform of securities market, and to enhance the efficiency of enterprise financing. Multi-angle, overall, systematic reform and methods are required.This paper makes overall research on financing efficiency relative to issuing system of securities market, microstructure of the market, corporate governance structure, behavioral model of investors, and government enforcement. In consideration of the general conditions of our nation, the paper also provides some suggestions such as to construct securities market systems, to supervise listed companies, to educate and train investors, and to transform government functions. This paper not only theoretically points out the way to construct securities market system in the future, but also operationally clarifies the correlation and mechanism between institutional restrain and financing behavior. The paper also directly lends itself to authorities to perform supervisory functions and to improve supervision efficiency in practice. At the same time, enterprises can acquire instructions from this paper on how to choose right financing style, to fix reasonable financing scale, to seize proper financing timing, to reduce financing cost, and to enhance financial efficiency.