Empirical Analysis On The Impact Of Issuing Additional New Stocks Nn The Excessive Investment Of Enterprises

Issuing additional new stocks has been increasingly popular with companies since 1990s and has become one of the most important ways of refinancing.In China's stock market,there are two ways of issuing new stocks,which are public additional issuing and targeted additional issuing.Before the equity division reform,listed companies in China refinance equity mainly by allotting shares and publicly issuing additional new stocks.After the implementation of the equity division reform and "measures for the management of securities issuance of listed companies'issued by CSRC,targeted additional issuing has boarded the stage of history as a new method of equity refinancing.However,targeted additional issuing system has been implemented for only a short period of time in China,starting from 2006.Besides,most studies on targeted additional issuing and public additional issuing focus on their announcement effect,long-term performance,earnings management before additional issuing and so on while few studies have been conducted on the influences listed companies' public and targeted additional issuing have on over-investment.The thesis explores listed companies' investment decisions after issuing additional new stocks from the perspective of over-investment.Will the listed companies' issuing additional new stocks lead to over-investment?Will the degree of over-investment vary due to different additional issuing methods?Will the enterprise value decrease because of over-investment?Based on these questions,the thesis firstly reviews the current studies at home and abroad and then gives a general description of the theories relating to the analysis of the influences of listed companies' additional issuing stocks on over-investment.After that,the thesis conducts theoretical analysis of the relations between companies' issuing new stocks and their over-investment,including theories like Cash Flow Hypothesis,Information Asymmetry Theory,Principal Agent Theory and so on.Lastly,the thesis draws the following conclusions based on empirical studies to verify the relevance among variables aiming at the proposed hypothesis:(1)Issuing additional stocks by listed companies will lead to enterprises' over-investment whether it is public issuing or targeted issuing;(2)Compared with targeted additional issuing,public additional issuing could lead to more serious over-investment in companies;(3)The higher the degree of listed companies' over-investment is,the lower enterprise value is.According to those conclusions,the thesis puts forward some suggestions,which are increasing the threshold for listed companies to issue additional new stocks,enhancing the information disclosure of listed companies after additional issuing and improving the management incentive system.The thesis is composed of five parts.The first part is introduction,putting forward the research background,research ideas and the framework of the thesis.The second part is the literature review at home and abroad,analyzing and summarizing the theories of issuing additional new stocks,different motivations for the companies'over-investment,the influences of issuing additional new stocks on investment as well as the influences of over-investment on enterprise value.After the literature review,the author also gives some comments on it.The third part is the theoretical analysis,in which the thesis explains the concepts of public and targeted additional issuing,compares their issuing rules,analyzing their advantages and disadvantages,summarizes the specific manifestation of companies' over-investment,and finally expounds theories like the Cash Flow Hypothesis,Information Asymmetry Theory,Principal Agent Theory and so on.The fourth part is empirical studies on the influence of issuing additional new stocks on over-investment.Firstly,the thesis compares the different impact targeted and public additional issuing have on enterprises' over-investment from the theoretical perspective and explains the reasons why over-investment can lead to the decrease of enterprise value.Then the author proposes three hypotheses:(1)Issuing additional stocks by listed companies will lead to enterprises' over-investment whether it is public issuing or targeted issuing;(2)Compared with targeted additional issuing,public additional issuing could lead to more serious over-investment in companies;(3)The higher the degree of listed companies' over-investment is,the lower enterprise value is.Lastly,the thesis further verifies the above three hypotheses by descriptive statistics,correlation analysis and multiple regression model.The fifth part is conclusion and suggestions,which summarizes the research conclusions of the thesis,presents some relevant suggestions for improvement and points out some disadvantages and limits of the research.