A Study on the Long-Run Performance of Chinese A-Share Listed Companies with Private Placement

Since theshareholder structure reform, private placement has become the most mainstream of the financing in the capital markets, the domestic research on the private placement mostly focused on short-term price effect and the issuance discount, etc., while the private placement's impact on the performance of the listed companies has attracted much attention from all parties. In this paper, we investigate 253 companies which have implemented private placement from 2006 to 2008 as the study sample, select five financial indicators - earnings per share, return on total assets, return on investment, current ratio, quick ratio. Afterwards, we design factor-analysis model to calculate the sample companies' performance scores. Through the comparison of the performance scores before and after the private placement, we found that the private placement does not significantly improve long-term operating performance of listed companies.