The Research Of The Equity Refinancing Behavior And Performance Of Chinese Listed Companies

In the capital market of developed country, listed companies rarely use equity refinancing as a way to raise funds. When the listed company announced equity refinancing options, market performance is often poor. That is to say, a listed company who raise funds through the securities market always presents a negative impact to the value of the company. Investors generally regard the listed companies in the securities market for equity refinancing as a company's poor management of information.This paper introduces the theory of refinancing of listed companies and the latest developments and its comments both domestically and aboard and I try to figure out how does the change of refinancing regulation by government influence the behavior of listed company in China. Then I review the refinancing of listed companies in China market development in the evolution process. The conclusions is that Chinese listed companies reached refinancing with a strong "equity preference". In the paper, I try to explain the equity refinancing preference in China with different classic western theory related to refinancing; then I try to explain this special phenomenon with the condition of Cost of Capital soft constraints in China. First, I use the comparison between the financial performance of listed companies who take the equity refinancing and the performance of all the listed company during 2002-2006 and find that it is the refinancing that makes the performance of the listed company depressed and recessive. In order to learn more about the reason of this phenomenon, a sample of 151 listed companies in 2007 which implement the refinancing behavior are Selected and the result is clear:The size of the company's equity refinancing has a negative impact to their performance so the Chinese securities market behavior of pairs of refinancing has a certain binding. If the allotment, Additional equity is resisted by the stock market, a number of listed companies will be forced to abandon the re-financing. Besides, Shareholding structure is irrational so the refinancing rate is low, the increase in the proportion of non-tradable shares would be significant deterioration in the performance of such refinancing.Here are some suggestions in this paper. First, we should solve China's irrational shareholding structure of listed companies, erect main corporate governance to monitor the company, address the state-owned shares of the property rights issues, make the largest proportion of state-owned shares of shareholders play a strong monitoring role of the management. Besides, we are supposed to start the reform refinancing environment and optimize the resource allocation function of the stock market can play and make the capital flow to companies high efficiency in the use of social capital. Also, we need to establish the bond market to create a multi-refinancing system.