The Study On The Equity Refinancing Preference And Performance Of Chinese Listed Companies

financing is the prevailing issue of the corporation and varies in types including retained earnings (accumulated deficit) bank loans payable, depreciation, issuing stocks, issue of treasury bonds, etc. the portion of these ways in the overall financing funds forms the corporate financing structure and indicates their financing preference.At present the domestic study are in line about the listed companies'preference in equity refinancing and the low efficiency, but it focus on a certain aspect like the cause for the preference or the phenomenon of low efficiency which lacks the study on the relationship of the two parts. In addition, the study for cause of low efficiency is based on the period of share merger reform. Rare researches showed up on the efficiency promotion problems of the domestic listed companies after the reform.In this study,using a combination method of normative analysis and empirical analysis. This piece of paper focuses on sorting out systems of the western financing theories and on the basis of which analyze the cause for the financing preference of the domestic listed companies through the research methods of exemplification of regulation. It comes to the conclusion according to the comparison of the performances between the refinancing companies and all A shares listed companies during 2002-2004 that there should be interconnection between the financing preference and the low efficiency, i.e. the equity refinancing results in the low efficiency. The main reasons for low performance of equity refinancing are: The low efficiency of capital use, lower rates of assets and liabilities and special ownership structure. Then use the method of empirical to analyze the market performance. The results show that the ratio of non-tradable shares is one of the factors but not the essential one for the low efficiency. The prominent negative effects on the performances of the companies are the scale for the enlarging the dividend stocks and the market value before refinancing while the indistinctively positive factor lies in the balance rate before the enlargement of stock dividend.