An Anaylsis Of The Causes,Paths And Economic Consequences Of The Privatization Of China Capital Stock

At the beginning of 1990 s,the domestic capital market is not mature enough in the early days,and the relevant domestic supervision is relatively strict,which can not meet the financing needs of domestic enterprises.However,the US capital market has a relatively mature operation mechanism and investment environment,so a number of domestic enterprises choose to list on the US capital market,setting off an upsurge of going public in the United States.In the past 20 years,China’s economy is in the stage of rapid development,the reform of the domestic capital market is increasingly effective.However,the disadvantages of the U.S.capital market have emerged one after another.Since June 2010,owing to the problems of financial fraud and disclosure issues,some Chinese capital stock companies have been attacked by short agencies represented by Muddy Water and Citron.The stock price of most of the enterprises has been greatly reduced,which leads to the phenomenon that the Chinese companies choose to withdraw from the American capital market.Against this background,this paper takes JA Solar as a case study object,then studies and analyzes the motivation,path and economic consequences of its privatization return from the existing theories and related studies.Firstly,by using literature research method,this paper sorts out the research results of domestic and foreign experts and scholars about the privatization delisting,privatization regression motivation,privatization regression path and the economic consequences of privatization regression,and then constructs the relevant theoretical system of privatization return of China capital stock.Secondly,this article explains the basic concept of China capital stock,VIE structure,privatization and backdoor listing,and analyzes the theory of undervaluation,information asymmetry and transaction cost.Then this paper sets forth the current situation,motivation and path of privatization of China capital stock.Based on these,this article uses the case study method to make deep analysis in JA Solar.By analysing its own capital market environment,the future development of the company and other factors,this paper works out the motivation of the return of enterprise privatization.Then,this paper analyzes the privatization return path of JA Solar,including the steps of privatization delisting,disconnecting VIE structure and returning to A-share market through backdoor listing.It also makes a comparative analysis on the IPO or backdoor listing of JA Solar,and finally sets forth the causes for its backdoor listing.On the study of the economic consequences of the return of JA Solar,this article firstly adopts the event study method to analyze the short-term capital market reaction of the return of JA Solar privatization to the A-share market,and then analyses the varieties of company value and financial performance before and after the return of JA Solar privatization to the A-share market.By doing this study,this paper finds out that the main causes for the return of China capital stock JA Solar through backdoor Tianye Tolian to the A-share market can be summarized as the undervalued value of enterprises in the United States,the high maintenance cost of overseas listing,the policy support of domestic photovoltaic industry,and the preferences between Chinese and American investors.Based on the research on the regression path of enterprise privatization,it is concluded that compared with IPO,the time cost and the passing probability of backdoor listing of JA Solar are more stable and efficient.In addition,in terms of the economic consequences of the return of privatization,by adopting the event study method,we conclude that the reaction of company in the short-term capital market is partial rationality.In the long term,the return of privatization improves the financing ability of enterprises and the operating conditions of enterprises.Finally,this article analyzes the case about the return of the privatization of JA Solar to the domestic capital market,and comes to a conclusion on the motivation,path and economic consequences of the enterprise privatization.Then,this paper offers the corresponding proposals for the companies and supervision departments,hoping to offer beneficial help and case reference for the companies that planned to return to the privatization.