The Empirical Research Into The Influence Of Convertible Bonds Financing On The Performances Of Listed Companies

Convertible Bonds is another new financing tool after the fundamental stocks and general bonds. The nature of convertible bonds is compounded by debt, equity and options. It is widely welcomed by issuers and investors in our stock market from the beginning. The diversification of China capital market development and internationalization of securities markets is promoted by the research of convertible bonds. From the perspective of issuers, the corporate governance structure can be further strengthened and improved by convertible bonds. From the perspective of investors, the unique financial nature of convertible bonds can be understood to weigh the risks and benefits to make rational investment decisions. From the perspective of regulators, the management of convertible bonds financing can be strengthened by convertible bonds, a reasonable supervisory system can also be designed to better guide and regulate the development of convertible bond financing.In China, the convertible bonds financing started in the early 90s. It has experienced nearly 20 years. From the pilot phase no relevant legal norms to the "Interim Measures on Management of Convertible Bonds" to "Listed Companies on Doing the Work of the Convertible Bonds Issued Notice", the scale of convertible bonds in China capital market financing is rising year by year. However, the desired efficiency of convertible bonds financing is worthy to be concerned.How does the company's performance change after the issuance of convertible bonds? What bring about these changes? Theoretical and empirical research is both conducted to address these problems in this paper. The main content is listed as bellow:Chapter one:The background and significance of this study is mainly introduced in this paper as well as current research of performance affected by convertible bonds at home and abroad. Then the research ideas and methods are described. At the same time, the innovative and weaknesses is pointed out.Chapter two:In the basis of understanding convertible bonds and company performance, the relationship between convertible bonds and corporate performance is combed from the three aspects of the principal-agent theory, capital structure theory and finance optimal theory.Chapter three:The history of convertible bonds financing and current status in China capital market are mainly to be reviewed and summarized. The problems of convertible bonds financing market in China are analyzed to empirical research for the chapter four.Chapter four:25 convertible bonds are selected to expand empirical study, which is issued by shanghai and shenzhen stock exchange market in 2003 and 2004. At the same time the industry control group is selected corresponding to the sample size. SPSS 11.5 statistical software is used to analyze trend of corporate performance during the six-year of convertible bonds issued before and after. The empirical results show that the performance of listed companies which issue of convertible bonds presented downward trend in two to three years after the release, then (2006 to 2007) showed upward trend in performance, finally performance in 2008 has generally declined. Compared with the industrial scale group, the performance of bond group is better than industrial scale group. The cause for decline performance of issued corporation after two to three years is analyzed with the impact of these macroeconomic environment factors excluded in this paper.Chapter five:Based on previous empirical findings of the study, convertible bonds in China do not play its real financial advantage. Listed companies should not blindly process convertible bonds. Reasonable means of financing should be selected according to their actual situation. Finally, related policy recommendations are respectively made to the securities markets and regulatory institutions and issuers. Theoretical and practical significance is emphasized in these issues.