The Efforts Of Private Equity Investment On Chinext Listed Companies' Corporation Governance And Stock Performance

In this thesis, we use the 224 companies listed in ChiNext Board before . May 31st, 2011 as sample and implement descriptive statistics and test of significance methods to analyze the efforts of private equity investment on public company's corporation governance and stock performance, and the different efforts of different classes of private equity institutions.At the beginning of this thesis, we review the definition, efforts, history and development of private equity in China, and assort private equity institutions into 4 different classes based on their source of capital. Then, we review and summarize some dissertations and papers related to our topic. After that, we use statistics methods to analyze the efforts of private equity investment on public company's corporation governance and stock performance. Our main findings include: (1) in general, private equity investment cannot improve the target company's corporation governance; (2) in general, private equity investment will depress the target company's stock performance. Furthermore, we find out that the efforts of different classes of private equity institutions are not identical. In general, the performances of government-backed private equity institutions are superior to their peers, and investments from these institutions can improve the target company's stock performance. At the end of this thesis, we give some possible explanations to our finding, and give some suggestions that maybe helpful to the development of private equity investment industry in China.