Empirical Study On The Effect Of Market Value Management On Equity Expansion

After the equity division reform, the equity of China capital market enterers into the era of full circulation and the value of market becomes a new standard of capital markets. The value of market reflects the strength of the listed company’s strength, becomes the standard of management performance measurement, reflects the capacity of company takeover and anti-takeover, determines the financing cost of the listed company, becomes the reflection of investor wealth size, or even the measurement of the country’s capital market and even the comprehensive national strength. Therefore, for listed companies, value-based management has become an important subject which they have to face. Compared with the traditional enterprise profit maximization, the value of market can reflect the enterprise operating conditions more comprehensively with more long-term reaction. Market value index can not only help managers overcome the disadvantages of only paying attention to short-term interests and ignoring the long-term development of enterprises, but also maximizes the consideration to the interests of all stakeholders.From a macro point of view, value-based management aims to achieve the goal of value realization through the value model, value description and value dissemination means. Value management created benign interaction between capital and company by using the volatility of the stock price. One of the purposes of value management is to expand equity, especially the equity of firm expansion. Therefore, value-based management will lead to the expansion of the equity market, reaching the purpose of capital operation. Equity expansion refers to the expansion of equity, dividing into equity virtual expansion and capital expansion according to the presence of inflows. Equity virtual expansion includes capital accumulation fund’s turning to equity and stock dividend, which will not result in virtual expansion capital inflows. Equity firm expansion covers rights, rights of stock and convertible debt, which can lead to capital inflows.At present, some scholars has made valuable researches on the market value management and capital expansion respectively, but the relationship between them and the effects of them are not included. The thesis tries to study the effect of market value management on equity expansion and prove the conclusion with empirical analysis, aiming to fill in the gap. Based on the perspective of market value management and the data of A-share listed companies in China, the thesis researches the effect of market value management of listed companies on equity expansion by combining normative and empirical researches scientifically. Through the value creation, the growth of value creation and value accomplishment, the thesis tests the impact of market value management on equity expansion, obtaining certain value of research results, relevant conclusions and recommendations. The paper mainly studies the five parts as following.The first part is introduction. This part introduces the research background and significance of this paper, the research status about market value management and capital expansion at home and abroad and the research ideas and methods of the paper, and puts forward the innovation and inadequacy of research in this paper.The second part is the related concepts and theoretical basis. It summarizes the theoretical basis and related concepts in the paper, mainly covering the signaling theory, the optimal price interval theory and the magic curve of market value management.The third part is the situation of the equity expansion in A-share listed companies in China. The data not only describes the status of equity expansion in China’s A-share listed companies, but proves that market value management influences the equity expansion.The fourth part is empirical test. On the basis of selecting A-share listed companies from 2010 till 2014 as research samples, the paper makes descriptive and correlation analysis on the sample data and summarizes and concludes the test results through selecting sample data and measure, building multivariate linear regression model, and using Excel and data processing software like Stata.The fifth part is conclusion. Based on the outlines of theories and empirical results, the paper makes summary of the research conclusion, proposes appropriate suggestions and put forward the future prospects of research.Through the study in the thesis, I found that the market value management does have effect on equity expansion:Value creation is negatively related to the equity expansion, but not significantly; Value creation growth is related to the equity expansion positively and significantly; Value accomplishment is related to equity expansion positively and significantly.