Research On The Impact Of Convertible Bond Financing On The Performance Of Listed Companie

Convertible bond is an innovative financial investment tool with both equity and bond properties and flexible clause design.Theoretically,the issuance of convertible bond can reduce agency costs,adjust capital structure and reduce information asymmetry,thus promoting the improvement of corporate performance.But our financial market preference equity financing has a long history,it turns out that convertible bonds have not successfully played the above advantages.In order to clarify the specific performance of listed companies after convertible bond financing and relevant influencing factors,this paper analyzes the influencing mechanism of convertible bond financing on the performance of listed companies based on the capital structure theory,agency theory and tradeoff theory.Combined with the realistic background of the development of Chinese convertible bonds,this paper proposes the hypothesis that convertible bond issuance and equity conversion will reduce corporate performance.The adjustment effect of corporate ownership structure in the process is also discussed.In order to verify the hypothesis,this paper is divided into two parts.First,study the impact of convertible bond financing on corporate performance.First,87 listed companies that issued convertible bonds from 2006 to 2019 were selected,and 174 comparable companies were matched by PSM matching method.Secondly,the fixed-effect model is used to study the impact of convertible bond financing on the operating performance of bond issuers,and the samples are further classified by nature and size for heterogeneity analysis.Finally,the regulation effect model is introduced to analyze the role of equity structure in the process of the impact of convertible bond financing on corporate performance.Second,study the impact of convertible bond financing on corporate market performance.Through the event study method,it pays attention to the market performance of the stock price of the issuing companies,calculates the average abnormal rate of return and cumulative average abnormal rate of return of the issuing companies,conducts significance test,and analyzes the results.Based on the empirical study,this paper draws the following conclusions: 1.The issuance of convertible bonds and convertible bonds to equity have a negative impact on the company’s operating performance;2.2.Higher ownership concentration will exacerbate the negative impact of convertible bond issuance and equity conversion on corporate performance;3.Strengthening equity checks and balances can weaken the negative impact of convertible bond issuance and equity conversion on corporate performance;4.The issuance and conversion of convertible bonds will adversely affect the company’s market performance.This means that under the current background of our country,convertible bond financing will bring adverse effect on corporate performance.In view of the above conclusions,this paper analyzes the reasons and puts forward the following suggestions: First,regulators should strengthen market supervision and improve the issuance system;Second,the issuing company should choose the right time to issue,improve the corporate governance;Third,investors should improve their investment ability and enhance their awareness of discrimination.