The Study Of Split Share Structure Reform To Listed Company's Performance

The phenomenon of the existence of tradable and non-tradable stock, namely split share structure is a unique characteristic of the Chinese stock market since it was born. Duo to the difference in liquidity between the two kinds of shares, thus it has distorted the operation mechanism of capital market. Until now, five year have passed since the China Securities Regulatory Commission (CSRC) promulgated the split share structure reform to which the public pay great attention. The reason lies to the reform fundamentally revolutionize the difference of non-tradable shares in liquidity and it is interpreted as a development milestone of domestic capital market. At present, the majority of listed companies have completed the reform. A lot of questions is to be answered. We really want to know if it really promote the performance of listed companies after the reform and which factors relate with the performance. Therefore, this article aim to answer these questions has great theoretical basis and practical significance. Both theoretical and substantial analysis has been made.First, for the theoretical part, based on the former research and a series of economic theories, such as the principal-agent theory, mastery theory and equity theory. The article first explores how the unique system of split share structure was founded from a historical perspective. Although it has took a positive part at the beginning, yet more and more drawbacks which have great negative influence, gradually emerge, with the development of the capital market.How to overcome the difficulties is a question that the CSRC has to face. Thus, measures should be took under the guide of the general objective for split share structure reform.Second, for the substantial analysis, with the help of statistical software, the article studies the efficiency on the split share structure reform of Chinese listed companies with the method of paired sample test and multiple regression analysis to three indices of both financial and market performance based on a sample of listed companies which have completed the reform before the deadline on Dec,31,2006. The results reveal that both financial and market performance has improved after the split share structure reform. We can also get the conclusion that the level of consideration offered by non-tradable shareholder to tradable shareholders and the control ability of the top one shareholder are two important and significant factors to the performance. The difference between them is as follows:the former is a negative indicator of corporate performance, while the latter just have positive effect on financial performance.At last, this article puts forward effective suggestions and measures for the regulatory authority and investor,with the hope to guide the performance of the listed company.