Research On The Relationship Between Business Performance And Over-investment After The Refinancing Of Listed Companies In China

As an integral part of corporate finance,seasoned equity offering(SEO)has been a hot area of research in recent years.The main reasons that can make many scholars study tirelessly are as follows: First,the use of funds is closely related to the SEO.It is very important whether the funds are used correctly.Second,SEO is a common financing method.It is an intuitive portrayal of the efficiency of capital markets in resource allocation unless it's healthy.Since 2000,except for the rights issue,the listed companies in our country mainly refinance the equity by means of issuance and convertible bonds.At the same time as the IPO system is still an approval system,which contributed to the investor's enthusiasm for SEO,followed by the amount of funds raised by the amount of days.However,many listed companies have blind financing,change the use of funds or over-investment,so that comparing to the performance before SEO,operating performance is very different.At present,China is in the process of building a modern economic system.Improving the efficiency of SEO of listed companies is not only the task of capital market reform,but also the fundamental guarantee of the strategic supportive role that capital markets play in the rise of big powers and important economic services.This paper takes SEO as a research background to explore the relationship between operating performance and overinvestment after SEO,which not only combines the efficiency of SEO,but also instructive for the analysis of market financing efficiency.At the end of the paper,some institutional suggestions are put forward based on the empirical results,and it is equally important to consider the perfect development of the market itself.This article chooses the companies that Shanghai and Shenzhen stock market refinancing in 2012 as the research object,selects the related financial information from 2009 to 2016 and tries to extend the time span of the sample as much as possible.According to the existing research results,this paper first analyzes the financial indexes that reflect the operating performance of the company,and uses the DuPont analysis method to decompose the Operating ROA to study the investment of the sample companies.It intuitively holds that the sample companies after the financing of over-investment suspects.Then,in order to show that the performance of the sample companies before and after refinancing did change,this paper verifies the existence of this phenomenon by using the Mann-Whitney test.In the use of the model to prove overinvestment,this article lists three methods commonly used in the literature,then three models' advantages and disadvantages are presenting,and article chooses to use two tier stochastic boundary analysis(SFA-2tier)to prove that the companies in the sample do indeed have overinvestment.Then,based on the classical q theory,this paper analyzes the relationship between investment opportunities and investment levels by establishing a simple model and using the principle that marginal revenue equals marginal cost.It is proved that if the company's investment expenditure is the optimal level,the performance change is positive,whereas the performance change is negative.The empirical process concludes by using Fama-Macbeth regression that the operating performance is negatively correlated with overinvestment after the company's equity in the sample is refinanced.There are many scholars in the past that the results of the study believe that the capital market can effectively improve the transparency of corporate governance and improve the company's production and management activities.This is different from the conclusion of this article,reflecting the dual characteristics of the capital market.