Market Reaction And Long-term Performance Research Of Private Placement

Compared with other equity refinancing methods,private placement has many advantages such as low issuing threshold,simple approval,and wide use of financing.After more than ten years of development,private placement has become the largest equity refinancing method in China.In 2019,China began to set up a science and technology board and Listing registration system.The science and technology board mainly provides services for science and technology innovation enterprises in the high-tech industry.This paper defines the industry that meets the policy guidelines of the Science and Technology Board as a high-tech industry,and deeply analyzes the differences between the high-tech industry and the listed companies in the traditional industry.This paper selects the listed companies that successfully implemented private placement in China from January 2010 to December 2018 as a research sample,and uses the event research method to conduct an empirical analysis of the samples to investigate the impact of the listed company’s industry and the listed board on the short-term market reaction and longterm performance of private placement,the empirical results are as follows:(1)In the short-term,the market reaction of the sample after the private placement will not be affected by the industry and the listing board of listed companies.Further research found that for listed companies in the traditional industry,listed companies on small and medium-sized boards and GEM have higher short-term cumulative excess returns than listed companies on the main board.(2)In the long-term,listed companies in the high-tech industry have higher maximum cumulative excess return than listed companies in the traditional industry.The listed companies of small and medium-sized board and GEM have higher maximum cumulative excess return than listed companies on the main board;Further research found that for listed companies in the traditional industry,companies listed on the small and medium-sized boards and the GEM have higher maximum cumulative excess return than the listed companies on the Main Board.Policy makers can improve the refinancing policy based on the research in this paper.Investors can use the research in this paper to obtain higher returns.