The Study Of Private Placement Has Impact On Company’s Performance

Under the background of reform of the shareholder structure, the way of privateplacement of our country’s listed company has become the preferred equity refinancing. Inorder to raise funds for the investment successfully, will there have the motivation to varnishthe financial report by earnings management? Does earnings management behavior haveeffect on the company’s performance? In order to explore the relationship of directionalissuance,performance and earnings management, this paper selects the private placement oflisted companies in2010as research samples and combines the method of normative analysisand empirical to test.About the relationship between private placement and earnings management, most ofthe domestic and foreign scholars suggest that earnings management behavior do exist in theprocess of directional issuance of listed company, but the great majority researched of themeans of earnings management were from the angle of accrual-based.With the constantimprovement of accounting standards, listed companies using accrued items to manipulatesurplus space is smaller and smaller, the managers has to change another means to manipulateand control the trading time surplus. This method is hidden and can reach the expected goal.From the two perspective of accrual-based and real activities earnings management, thisarticle aims to study that whether there is a significant earnings management behavior beforethe directional issuance of listed company. The results show that in the previous year of directional issuance, the listed company exists significant earnings management behaviorand use two means of earnings management to manipulate surplus. Most of the literaturesuggest that after the listed company issuance, performance would be decline. On thebackground of reform of the shareholder structure, does the private placement company’sperformance will also showed a trend of decline? This paper uses the descriptive statisticalanalysis to test the performance of listed companies, the results show that after privateplacement, companies performance decline, which is consistent with the hypothesis. In thispaper, the nature of earnings management is based on the the theory of "earnings managementis harmful", the relationship between the earnings management and performance ofperformance may be negatively correlated. The means of accrual-based earnings managementis using accounting methods and has not change the operating situation, real activitiesearnings management is actually changing the operating of the enterprise, which has someeffects on the long-term development of the enterprise. Real activities earnings managementmay be the main reason for that the company’s performance declines in a long time afterprivate placement. Based on this hypothesis, this paper tests the hypothesis throughcorrelation analysis and regression analysis, it founds that the relationship between the degreeof earnings management and the performance of listed companies is significantly negative,and real activities earnings management considers to be the main reason for the declining ofcompany performance.