Equity Concentration, Refinancing Cost And Refinancing Performance

In 2015,we saw a big bull market China’s stock market and CSRC lifted restrictions on the company’s debt issuers and widened the ways of debt issuing,which was a big step of the market of listed company refinancing in consideration of bigger and bigger refinancing numbers and scale.Refinancing could solve the money resource of listed company and support the operation of company,which is necessary for a company’s future.Especially in recent years,with the support of more and more policies,it has attracted wider and wider attention.So it’s meaningful to study this problem now.When listed companies considered refinancing,there are two ways they could adopt,which are equity and debt and there are two factors they mainly pay attention to,which are cost and financing performance.This paper decide to use the ownership concentration as the breakthrough point to study refinancing of listed companies and make empirical analysis based on all the refinancing events of listed companies from 2015 to 2016 to research the influence of the ownership concentration on the cost and performance of different refinancing ways.This paper decide to use CR1 and CR10 to measure equity concentration which is currently the most commonly used in academic research and use the most widely accepted way to calculate the refinancing cost and performance.At the same time,this paper contains other features of listed companies in the same framework to study their effect on refinancing.The result show that when listed companies refinance,equity refinancing cost is negatively associated with the biggest shareholder’s ration and the cost of debt refinancing has little to do with equity concentration.In terms of the performance of refinancing,both equity refinancing and debt refinancing are positively related with the aggregate shareholding of the biggest 10 owners.