Chinese Listing Corporation Illegal Market Reaction Research

The primary goal of the securities market regulation is to protect the interests of small investors.-However, there existed 6726 violation cases during May 31,1996 to March 14,2014 amongst all listed companies, since 2009 the listed Corporation violations showed an increasing trend year by year, resulting in giant losses of investors. Listed There were no agreement among relative research whether Corporation violations would impose negative or positive effect on securities market. Under such a background, this paper focuses on the research of market reaction to China’s listed Corporation irregularities.On the basis of the relevant research results, this paper selects China’s Shanghai and Shenzhen A shares market listed Corporation violations as samples from 2003 to 2012. Using the two element classification of linear regression model (Logistic model) to study China’s listing Corporation violation, draws the following conclusion:l.the ownership concentration degree high listing Corporation violation probability is lower, more dispersed ownership control of the listing Corporation of greater probability.2. There exist Significant positive correlation between executive shareholding ratio and the listing Corporation the violation probability.3. The violation probability of listing Corporation with more active stock transactions active is lower.4. internal audit mechanism has no restrictions on the listing Corporation violation.5. high debt to asset ratio is the motivation of listing Corporation violation in China.Firstly, the paper use the event study method to conduct a full sample test of market reaction to listed Corporation violations run the classification test of the market response to violations - according to the different influencing factors, finally comes to 6 conclusions:1.regulatory penalties for violations of the market listing Corporation, recently there are expected in the event, the event day negative reacted strongly, and afterwards also have a negative impact on sustainability.2. different regulatory penalties for violations are listing Corporation, market expectations and respond in advance, the event will have a negative impact on sustainable.3 listing Corporation regulated institutions public criticism, denounced, publicly punished, The largest public punishment on the market the degree of negative influence, to denounce not deterrence.4.the market for listing Corporation illegal occupation of company assets, insider trading is most strongly manifested negative reaction, overreaction.5 different industry listing Corporation illegal punishment, before the announcement of the market are expected, the expected time most early, the punishment for information transfer was most effective information technology and communication services industry.