| The Management for Insurance of Securities by Listed Companies has been published in May,2006. Since then, the private placement of listed companies in China has been widely supported and becomes one of the most important refinancing methods in recent years. During the implementation of the private placement program by Listed Companies, the most significant feature is the discount rate on insurance price. A large number of studies have indicated that this is a way of transmission of the interests for the major shareholders. In addition to major shareholders, another important category of participants in the private placement process are institutional investors. In recent years, the rapid development of institutional investors has attracted a lot of attention in capital market. Their specialty and scale of investment have become a major force in the capital market. Some scholars found that in the private placement case where there are institutional investors participating in, the discount rate will be significantly reduced, which shows that institutional investors to a certain extent, regulate the private placement market.This paper reviewed many researches on the discount on prices of private placement did by domestic and abroad scholars, combined theoretical analysis and empirical research to test the effects of two important categories of participants, namely major shareholders and institutional investors, on the discount rate in private placement processes. In this paper, we used private placement cases from the year 2006 to the end of 2014 as the research sample, firstly, tested the effects of the major shareholders on the discount rate of private placement. Though this issue has been tested before, several scholars used the latest samples in China to prove. Secondly, we tested the effects of the institutional investors on the discount rate of private placement. As institutional investors develop in recent years, studies on them in previous years are less. Finally, we tested the interact effects of large shareholders and institutional investors on the discount in the private placement process.Through the empirical results, this paper draws the following conclusions:The participation of major shareholders in private placement subscription increased the price discount of the private placement; The participation of institutional investors in the issuance of private placement subscription can reduce the discount rate of private placement; When both large shareholders and institutional investors participate in the private placement at the same time, institutional investors will restrain the increase effect of major shareholders on discount of private placement. |
