Research On The Motivation And Economic Consequences Of Spin-Off Listing From The Perspective Of Parent Company

In recent years,with the gradual liberalization of relevant policies on spin off listing and the full implementation of the registration system,spin off listing has gradually emerged in China’s capital market.As a shrinking asset restructuring method,spin off listing can effectively reduce the negative synergy effect caused by the excessive diversification of enterprises,and has many advantages that are conducive to the development of enterprises,such as broadening the source of funds.Therefore,more and more domestic listed companies choose to spin off their subsidiaries for independent listing.Scholars at home and abroad have done a lot of research on the related issues of spin off listing,but most of them focus on the performance of spin off listing of individual enterprises.Based on this situation,this paper selects CDBIO and BCHT,two of the first batch of ’ A split A ’ enterprises in China,which are both listed on the science and technology board,to make a comparative analysis and study the differences in economic consequences caused by different spin-off listing motivations.This paper mainly analyzes the case of LNCD splitting CDBIO and CCHN splitting BCHT through case analysis and comparative analysis,combined with the relevant theoretical system of spin-off listing.Based on the perspective of the parent company,this paper analyzes the similarities and differences of the spin-off and listing motivations of CDBIO and BCHT from the perspectives of financing,management incentives,enterprise development strategy and market value management,and compares the different economic consequences of the spin-off listing behaviors of the two companies from three aspects :market reaction,financial performance and innovation performance.This paper draws the following conclusions through research : Firstly,spin-off listing can broaden the financing channels of enterprises and provide more financial support for enterprise development.Secondly,spin-off listing can enhance the incentive effect of management and enhance the enthusiasm of subsidiary management.Thirdly,differences in strategic perspectives can lead to different economic consequences for the parent company after the spin-off.From the perspective of the overall development of the enterprise,based on the selection of the core business strategy,the subsidiaries with large differences in the main business of the parent company are split and listed,which is conducive to the improvement of the business concentration of the parent company,and can bring positive market reaction and financial performance to the parent company;however,only from the perspective of subsidiary development,in order to promote the development of subsidiaries,the core parts with strong profitability and high contribution to the profits of the parent company will be split,which will have an adverse impact on the market reaction and financial performance of the parent company.Finally,the market value management perspective of spin-off listing will affect the overall value of the enterprise.Spin-off listing based on information asymmetry theory and market timing theory will bring different market reactions to parent companies.