Study On Control Right Transfer And Stock Prices

After the Split-Share Structure Reform,the non-tradable shares were able to be traded in the market,which increased the liquidity of China's stock market.The increased number of stock exchange also stimulated the frequency of control right transfer events to increase.This paper,based on the Theory of the Market for Corporate Control,the Contract Theory and the Signaling Theory,analyzes the impact of transfer ways on the transfer price,the premium and the stock price.The result of multiple regression indicates that the premium rate is relatively higher when the control right is transferred by the agreement.The secondary market transfer can reduce the transfer premium rate and increase the transfer price.Based on the event research method,we find that in the long term,the control transfers do not have an improvement on the market performance of the company.In the short term,companies' stock prices rise significantly when the control right is transferred by agreement,however,the control right transferred in the secondary market has less impact on stock prices.In the long term,the stock performance of the companies transferred by agreement reverses and is underperforming the companies whose control right is transferred in the secondary market.The further research reveals that,the transfer premium rate has a negative effect on the long-term CAR of the company's stock price.The transfer premium plays a partial intermediary role in the impact mechanism of the transfer way to the company's stock price,but the premium's transmission is blocked when the stock market falls.Accordingly,we deem that the efficiency of control transfer market should be improved;high premium rate reflects the major shareholder infringes on the interests of small and medium shareholders.In the aspect of reducing premium rates and the control rights transfer events' stock influence,the secondary market transfer is superior to the transfer by agreement.Regulations made by supervisions are supposed to raise the requirements for information disclosure of control right transfer and encourage the non-market trade to be replaced by the market-oriented one.The listed companies ought to maintain a reasonable ownership structure,which reduces the premium rate and promote the efficiency of corporate governance.When a transfer of control right occurs in the listed company,small and medium shareholders have to pay attention to the transfer way.