The Effects Of Equity Financing On Listed Enterprises In Strategic Emerging Industries

The strategic emerging industries have drawn a lot of attention after the world-wide crisis. As China is in the key period of transforming the economic structure and development style, helping to support the industries’growths has been an important strategy. The central and local governments have released a series of policies to push forward their developments, which makes strategy emerging industries expand in a quick way. However, it’s still difficult for enterprises in the industries to finance due to the systematic imperfection of onshore capital market. Thus, it is of great practical significance to study the financing structures of enterprises in strategic emerging industries, and especially whether equity financing would accelerate their development.This article regards the listed enterprises in strategic emerging industries as the objects to study the effect of equity financing on enterprises’performances. Firstly, this article reviews the literatures at home and abroad, then defines the concept of the industries, summarizes the theories of the effects of financing structures on performance, and proposes the influencing mechanism. Furthermore, this article based on the listed enterprises data to analyze the situation of current strategic emerging industries. At last, this article does empirical analyses to test the effects of equity financing on performance.According to the theoretical and empirical analyses, this article draws the following conclusions:Firstly, efficient financing can promote the development of strategic emerging industries and equity financing has positive effect on enterprises’ performance. Secondly, it is of prominent differences between the areas. As equity financing can accelerate enterprises’performances in eastern area while has negative effect on those based in central and western areas. Thirdly, there also exist opposite effects on performance of those enterprises owned by state and private person. In order to help the strategic emerging industries to grow quickly in China, enterprises should enhance their own capabilities, taking full advantage of equity finance to improve their performance. Meanwhile, governments should also play roles of offering policy guidance and finance support for strategic emerging industries.