Empirical Research On Seasoned Equity Offering Market Timing Behavior Of Listed Companies In China

According to marxist classical theory, If an enterprise want to develop, it need to expand production. The expansion of the scale of production must have corresponding capital support, therefore, adequate funds is the necessary condition of the enterprise’s development. Enterprise financing behavior is the behavior of the enterprise to meet the needs of their own to capital raising and concentration of funds.Because of different financing behavior will form different financing structure and capital structure, thus the financial position of the company even survival development ability, a major impact a listed company, therefore, the financing behavior again as the company financial management of the core and become the focus of concern from all walks. Because of our country’s financing costs, corporate governance structure and market environment are notable differences with the western countries, thus the listed companies in China showed difference with the financing behavior of western developed countries and it seemed that the classic financing theory in westen countries have no ability to explain our country’s conditions.In2005,our stock market since then began the reform of non-tradable shares, it has basically solved the problem that plagued by our country securities market "the same securities but different right". But our listing company’s behavior of refinancing is still be puzzled with the problems like the efficiency of the usage of finance is low, the structure of the company is not efficient and investors interests suffer a loss, etc. So to analyze our country’s refinancing behavior has theoretical and practical importance.Western traditional company financial theory believe that business goal is to realize the maximization of the intrinsic value of the enterprise. Generally when a company want to finance, it follow the sequence like internal finance, the creditor’s right financing and equity financing.But in our country, because of the special system of background and economic environment, the listing company are commonly favor the equity financing. The traditional financing theory can not count on such a unique phenomenon.Based on the above, the article are started from equity division reform in our country according to the refinancing market timing theory to discuss the refinancing problem.This paper’s main line is the listed company’s refinancing, and is based on the theory of the efficient market hypothesis, the capital asset pricing model and the MM theory. Firstly, it expounded market timing choice theory development status and the research results at home and abroad. Secondly, it analysis China’s equity refinancing’s situation, and then search for whether there is refinancing market timing after share-trading reform by different inspection. Then based in the earlier part of the paper,we analyzed every part of the effect. At last, we get the conclusion and the policy suggestions.This paper mainly lies in the innovation of the following part:firstly, the paper studies the Chinese stock market since the reform of non-tradable shares of the listed company of the equity and financing activities, the selection of angle is new. Analize in the background of break the "until with a different rights", achieve the full circulation of the background, the listed company’s refinancing behavior in the equity market. Second, in the study of this paper, the selected samples are the listed companies, which had equity financing during the sample period. Since the sample data is more comprehensive, based on this condition, it’s reliable to get the conclusion of the research on whether there exists market timing when refinancing. Third, on the research course of whether there exists market timing in our listed company, this paper will use descriptive statistical and the Logit equation method to verify the listed companies in China from different angles. The results obtained are the same, so the results have a relatively credibility.Through multi-angle empirical tests on equity refinancing of the listed model companies from2006to2011, based on the test of refinancing market timing, the author finds out there is a good synergistic effect between the amount of refinancing and the average M/B value of the securities market by using descriptive statistical tests. This phenomenon preliminarily proves that market timing existing refinancing capital market. Then, the author selects the former M/B value before refinancing, the current turnover rate, the current net return on assets, the asset-liability ratio, company size and tangible assets ratio as the explanatory variables, and selects the proportion that equity financing accounted for external financing as the explained variable. After this step, this paper will establish regressive equation. The result shows that there presents a significant positive correlation between M/B value and the proportion that equity financing accounted for external financing, this means there really do exist market timing selection by using the overvalued enterprise. Besides, based on the above explanatory variables, the author defines1when refinancing, and0when no refinancing as a new virtual explanatory variables to make Logit regression. The result shows that:there is a significant positive correlation between the former M/B value and whether equity refinancing, it also shows there exists market timing behaviors in China’s listed companies.Then, based on the above conclusions, this paper analyzes the effect of refinancing market timing behavior from all aspects. Firstly, we need to consider the relationship between the refinancing market timing and stock index, through descriptive statistical tests, we find again there is a certain correlation between the refinancing behaviors and the stock index. Secondly, we will try to find out the inspection that the refinancing market timing selection has on the company’s capital structure, and the result shows after refinancing market timing selection, it will do some positive effect on the short and long capital structure. Lastly, the author will study the inspection which the refinancing market timing selection does on the changes in the interests of the various stakeholders in the listed company. The study finds that in a certain period, the stakeholders who have stocks will suffer a loss, while the relative executives have a stable obtains. At the end, this paper will give some policy suggestion based on the above conclusion.To sum up, this paper on the listed company’s market timing refinancing research both basic got the expected results. I hope it can give the listed companies some suggession during their refinancing market timing process, for securities related regulatory departments to provide some advice and for ordinary tradable shares investment decision to provide some help...