1501211773

2006 1

2007 1 1 2015
12 31

Operating
Return on AssetsOperating Return on Sales
Current Asset Turnover Rate Total Asset Turnover
RateCapital Expenditures to Assets

1
 Operating and Financing Performance of Switching
Firms from NEEQ to Other Boards
Pei-Ying Tsai ( Finance )
Directed by Jin Lee
ABSTRACT

National Equities Exchange and Quotations (NEEQ) is established to provide companies

who have financing demand while are not qualified to initiated publish offering. However,
since established in January 2006, some companies still cannot meet their financing needs,
and therefore they choose to leave NEEQ, and switch to Main Board, Growth Enterprise
Board or Small and Medium Enterprise Board, which is called Switching. Nowadays, the
authorities is still discussing the official switching regulations but has not published yet, so
these companies can only switch by applying IPO, merging with firms that on the other
boards, or back door listing. But will these companies get better performance after
switching? Most Chinese researches are relevant to the regulation itself, few discusses the
performance, while most abroad researches are relevant to the mature capital market such as
the U.S., Korean, Japan, English, and so on, not including China. Therefore, this paper
attempts to analyze the switching firms operating and financing performances by comparing
these firms with control group, and to discuss whether the performances do get better.
This paper applies the data of NEEQ switching firms from January 1, 2007 to December
31, 2015, and searches control group by comparing same industry code, similar total asset
book value, return on assets, and financing amount. This paper will analyze the operating
performance including operating return on assets, operating return on sales, current asset
turnover rate, total asset turnover rate, and capital expenditures to assets, and the financing
performance including debt-to-asset ratio, debt with interests to total financing ratio, trading
amount in a block period, actual trading days, mergers and acquisitions times and amount.
After the discussion, this paper finds that the operating performance does not get better while
financing performance gets better after switching.

KEY WORDS: NEEQ, Switching, Performance

...............................................................................1

ABSTRACT...........................................................................2

...............................................................................3

.............................................................................4

...................................................................5
1.1 ................................................................................................................................5
1.2 ............................................................................................................................6
1.3 ................................................................................................................................8
1.4 ................................................................................................................................9

......................................................10
2.1 ............................................................................................................................10
2.2 ............................................................................................................................................12

..........................................14
3.1 ..........................................................................................................................................14
3.2 ..........................................................................................................................................15
3.3 ......................................................................................................................17

..............................................21
4.1 .................................................................21
4.2 ......................................................................24
4.3 ..........................................................................26
4.4 .............................................................................29

................................................................32
5.1 ..............................................................................................................................32
5.2 ..........................................................................................................................................33

..........................................................................34

..............................................................................36

..........................................37

1-1 2016 12 31 .................................................................................5

1-2 ..............................................................................................................................8
2-1 ................................................................................................................11
2-2 ............................................................................................................13

3
 2-3 ....................................................................................................................14
3-1 ............................................................................................................................15
3-2 ............................................................................................................16
3-3 ............................................................................................................17
3-4 ....................................................................................................18
3-5 ...................................................................19
3-6 ...........................................20
4-1 ....................................................................................21
4-2 .......................................................................22
4-3 I.....................................................................23
4-4 II....................................................................24
4-5 .......................................................................24
4-6 ...........................................................24
4-7 I.........................................................25
4-8 II........................................................26
4-9 ....................................................................................26
4-10 .....................................................................27
4-11 I...................................................................28
4-12 II..................................................................28
4-13 .....................................................................29
4-14 .........................................................30
4-15 I.......................................................30
4-16 II......................................................31

1.1

2017 2 28
10,757 6,097.74 2,569.16
 2016
10,163 5,851.55 2,386.81
286.30 1,643.55 A 1,172
32,707.76 29,372.25 44,367.10
493,730.88 A 1,855
16,042.53 11,763.80 49,410.43
770,182.93 570 2,630.61
1,700.44 9,443.03 215,410.84
822 6,423.69
4,465.89 20,322.07 340,603.80
1-1 2016 12 31
2016/12/31
A A
10,163 1,172 1,855 570 822

5,851.55 32,707.76 16,042.53 2,630.61 6,423.69

2,386.81 29,372.25 11,763.80 1,700.44 4,465.89

286.30 44,367.10 49,410.43 9,443.03 20,322.07

1,643.55 493,730.88 770,182.93 215,410.8 340,603.8
4 0
/ 11.995% 151.970% 420.021% 555.329% 455.051%

2007 1
1 2017 2 28 131 14
117 0
88 361
449 4.418%
88 40
361 171
47%

1.2

3000

14,500

15,000

1.2.1

2011

2010

2015
1.2.2

Nasdaq NYSE AMX AMX NYSE KOSDAQ

KOSPI AIM Main Market Jasdaq TSE
TSX TSX

Nasdaq NYSE
AMX
NYSE
Baker
and Johnson 1990 Bhardwaj and Brooks 1992 Kadlec and McConnell 1994
Baker, Powell and Weaver 1999
Nasdaq
NYSE 5% 6%Sanger and McConnell 1986Kadlec
and McConnell 1994
Sanger and McConnell 1986 Grammatikos and
Papaioannou 1986

Dharan and Ikenberry 1995 Nasdaq

NYSE Nasdaq Reinganum
1990Spread
NYSE
Nasdaq NYSEAggarwal and Angel 1997
Barber and Lyon 1996

Papaioannou
et al. 2003

Amihud and Mendelson 1988 Simi Kedia and Venkatesh Panchapagesan

2011 Nasdaq NYSE

2
1.5
2 1.5

Simi Kedia and Venkatesh Panchapagesan 2011

Bennet and Wei(2006)

7
 KOSDAQ KOSPI Jong-Ho Park, Ki Beom Binh, and
Kyong Shik Eom(2012)

KOSDAQ KOSPI 38
Trading-related market

Blue chipsFlagship
firms

1.3

1-2


1.

2.






1.4

2007 1 1 2015 12 31

2017 2 10

2007 1 1 2017 2 28
2007 1 1 2015 12 31
9


2.1

2001

2006 1

2012 7 20

30%

2007 11 16 5

2016 5 27

2000 10%
50%
4000 2000 60
6 5000
6 50
2017 2

2.1.1

200 200

 2.1.2


500
300
2-1

1. 3 1. 2
>3000
2. 3 2. 2
>5000
>3 1000
3. 1
20%
4. 500

5. 3000 5000

6. 5000
30%
7. 25% 3.
8. >4

10% 4.

3000
1. ()
500

11
 500
2.
300
200 200
200
1000 1000 100 100

T+1

930 1130 1300 1500

6 2 3

2.2

10,163
2007 1 1 2017 2 28 131

 14 117
0 88
361 449
4.418% 88 40
361 171
47%

2.2.1

2-2










PE/VC
IPO

2.2.2
2006 1 2007 1 1 2017 2 28
131 22 58

13
51 14 117
0
2017
2

2-3



2007 0 0 1 1 1 0 0 1
2008 2 0 1 3 0 3 0 3
2009 0 1 1 2 2 0 0 2
2010 2 1 4 7 1 6 0 7
2011 1 4 5 10 2 8 0 10
2012 2 6 5 13 2 11 0 13
2013 1 5 7 13 0 13 0 13
2014 4 11 6 21 1 20 0 21
2015 6 14 7 27 3 24 0 27
2016 4 15 14 33 1 32 0 33
201
0 1 0 1 1 0 0 1
7
22 58 51 131 14 117 0 131

3.1

OLS

OLS

ST
2017 2 28


2007 1 1 2017 2 28 131
2007 1 1 2015 12 31 97
44

3.2

H0
H1

H0
H1

H0
H1
3-1


3.

4.

15


3.2.1

Papaioannou et al.(2003)
Operating Return on Assets
Operating Return on Sales Total Asset Turnover
RateCapital Expenditures to Assets

T
95%

3-2


100





100




100





100





100


3.2.2

Simi and Kedia and Venkatesh Panchapagesan(2011)

Z 95%

3-3


100


/
100

3.3

2007 1 1 2015 12
31 97

17
 12 85 0
10
10 34
34
3.3.1

Papaioannou et al.(2003)
NASDAQ NYSENASDAQ AMEX AMEX NASDAQ

2007 1 1 2015 12 31

12 Choice
91 Choice 0
2015 4 19
ST 2015 6 16

3.3.2
3-4

12 11

351,957,179.6 203,396,441.3 188,427,293.2 12,518,353.7
10.88917 7.51 10.4930266 6.74259

5
 40,395,692.72 32,700,000 12,866,160.14 6,000,000

85 85

476,816,824.6 129,085,132.6 345,070,093.8 103,961,500
3.29812 10.56 7.71958 7.85932
88,784,840.96 19,980,000 91,864,126.43 18,627,150.89

Barber and Lyon1996Matching-firm approach

60%
130%

Operating Return on Assets

70% 110%

60% 110%

Barber
and Lyon1996

90% 110%
2007 1 1 2015 12 31 96
27 37 32
3.3.3
12 5

10 85
Arbel and Strebel (1982, 1983)Baker, Powell and Weaver (1999)
Christie and Huang(1994)
19
 51
34
3-5

10 10

361,197,576.27 287,107,437.1 179,913,521.38 130,000,595.36

3 4 1
160,752,372.96 141,227,552.2 88,568,736.688 58,050,649.445
2 0
28,251,767.648 26,554,213.94 7,520,395.959 11,749,596.29
5
14.099 16.1751 5.60128 8.9286

20.767 17.7661 4.01943 0.5791

-421,684.139 5,411,397.595 2,088,357.265 -1,125,254.80

7,966,674.302 3,009,515.295 -5,461,755.578 -2,995,678.375

785,074,201.07 638,558,540.6 265,569,700.65 151,047,375.78

8 6 7
201,190,656.64 185,809,537.2 106,427,159.59 55,329,068.135
7 1 3
33,510,500.277 32,378,441.59 8,010,678.523 9,300,789.81
5
8.4687 7.2333 5.6861 6.3531

21.1173 18.1298 5.4999 12.7483

10,153,666.58 8,272,107.71 10,097,627.921 12,988,538.685

0

234,448,844.23 265,530,059.1 2,404,286.024 1,920,800

2 6

3-6

34 34

242,332,804.754 75,504,677.185 287,309,442.669 81,629,612.20

4 4 5
183,881,819.163 69,315,017.110 132,937,375.220 44,704,203.80
8 5
12,859,844.2047 6,207,791.155 8,646,712.2218 2,981,356.980

8.14866 9.42844 9.19324 9.70699

6.29450 7.54745 0.62784 7.95860

4,182,532.4165 107,575.320 - -676,691.245

36,491,008.1503

14,662,568.1241 7,487,278.085 7,563,983.0885 2,556,549.375

358,275,903.374 127,840,620.86 281,866,405.384 78,233,960.14

4 5 8 5
380,032,651.596 97,634,035.495 142,858,765.470 50,551,653.22
2 0
21,948,847.4462 7,105,071.700 11,147,887.4071 3,063,786.105

8.5333 9.7803 11.9592 8.9637

7.3921 10.1984 4.1178 6.5434

-9,363,374.6244 -735,027.255 2,958,783.0221 3,810,899.23

64,950,803.1538 9,791,064.64 4,454,489.8379 1,414,351.055

21


4.1

4-1


10 10 10 10

14.3901 13.279 4.52993 4.15429 5.6012 8.9286 7.60673 3.5713
9 3 8 0
21.2563 17.705 17.2340 15.4785 4.0194 16.2383 12.2923 8.7233
9 6 4 5 3 5 9 5
0.88632 0.6102 0.37705 0.27839 0.6910 0.57906 0.66068 0.6971
5 4 6
0.57365 0.5351 0.25513 0.20530 0.4892 0.47910 0.49300 0.5006
0 5
0.76833 0.4291 - -2.3307 0.5732 0.35825 0.60775 0.3579
5 2.05078 5
4.1.1
10 10
H0
H1 95%
T test P-value
0.05 H0

4-2
T test
(P-value)
10 10

 14.39019 13.2793 5.60128 8.9286 0.14734
21.25639 17.7056 4.01943 16.2383 0.18954
5
0.88632 0.61025 0.69104 0.57906 0.34986
0.57365 0.5351 0.48920 0.47910 0.44722
0.76833 0.42915 0.57325 0.35825 0.72852
4.1.2

H0
H1
95% T test
P-value 0.05

P-value 0.05 H0

10
2009
2015

GDP

23.09624%
30.03822% 24.36394%

3.61

Reinganum1990

Papaioannou et al.2003

23
 4-3 I
T test
(P-value)
10 10

14.39019 13.2793 4.52993 4.15429 0.00774*
21.25639 17.7056 17.23404 15.47855 0.245587
0.88632 0.61025 0.37705 0.27839 0.010922*
0.57365 0.5351 0.25513 0.20530 0.005988*
0.76833 0.42915 -2.05078 -2.3307 0.005287*

H0
H1
95% T test
P-value 0.05 H0

P-value 0.05 H0

-5.573% 1.157%

4-4 II
T test
(P-value)
10 10

4.52993 4.15429 7.60673 3.57130 0.16767
17.23404 15.4785 12.29239 8.72335 0.19005
5
0.37705 0.27839 0.66068 0.69716 0.02255*
0.25513 0.20530 0.49300 0.50065 0.01024*
-2.05078 -2.3307 0.60775 0.3579 0.00637*
 4.2

4-5


34 34 34 34

8.14866 9.4284 6.07625 5.95184 9.1932 9.70699 10.1137 6.2807
4 4 5 8
6.29450 7.5474 13.6090 9.47030 0.6278 7.95860 0.20656 7.6581
5 8 4 0
1.69922 1.3791 1.01490 0.69240 1.1536 1.07380 0.59193 0.4452
0 5 0
1.69322 1.2558 1.17737 0.58161 0.9440 0.91576 0.50043 0.4084
6 0 6
1.01708 0.5467 0.34499 0.04265 0.8350 0.41585 0.24466 0.8787
5 6 5
4.2.1
34 34
H0
H1 95%
Z test P-value
0.05 H0
P-
value 0.05 H0

4-6
Z test
P(Z<=z)
34 34

8.14866 660.6927 9.19324 349.07063 0.84799
2
6.29450 277.7162 0.62783 1483.2578 0.43105
6 4
1.69922 2.69033 1.15365 0.39141 0.06996
1.69322 2.44261 0.94400 0.24323 0.00768*

25
 1.01708 1.86016 0.83506 1.50827 0.56308
4.2.2

H0
H1
95% Z test
P-value 0.05 H0
P-value
0.05 H0

59.86%

4-7 I
Z test
P(Z<=z)
34 34

8.14866 660.6927 6.07625 262.39448 0.34541
2
6.29450 277.7162 13.60908 1786.5823 0.17393
6 7
1.69922 2.69033 1.01490 1.93396 0.03176*
1.01708 1.86016 0.34499 3.25062 0.95849

H0
H1
95% Z
test P-value
0.05 H0
P-value 0.05 H0

4-8 II
Z test
P(Z<=z)
34 34

6.07625 262.39448 10.11375 202.06580 0.13733
13.6090 1786.5823 0.20656 2729.1080 0.12242
8 7 0
1.01490 1.93396 0.59193 0.21039 0.04606*
0.34499 3.25062 0.24466 16.83284 0.55193

3.61
4.066

4.3

4-9


10 10

27
 29.94258 30.00449 20.18663 9.79264
/ 17.36598 16.14796 10.24108 1.518236
200909.0909 0 19424197547 13835317023

7.81818 2 341.36364 365

0 0 0 0
0 0 0 0

10 10

36.05372 34.84734 36.05372 34.84734
/ 16.56514 16.76087 16.56514 16.76087
52504831.64 0 52504831.64 0
28.63636 1 28.63636 1
0 0 0 0
0 0 0 0
4.3.1
10 10
H0
H1 95%
T test P-value
0.05 H0

4-10
T test
P-value
10 10

29.94258 30.0044 36.05372 34.8473 0.52333
9 4
17.36598 16.1479 16.56514 16.7608 0.90885
6 7
4.2.2

H0
H1
95% T test
P-value 0.05 H0

2,210,000

4-11 I
T test
P-value
10 10

29.94258 30.0044 20.18663 9.79264 0.13147
9
17.36598 16.1479 10.24108 1.518236 0.13570
6
200909.0909 0 19424197547 13835317023 -

7.81818 2 341.36364 365 -

H0
H1
95% T test
P-value 0.05
H0

Amihud and Mendelson (1988)Simi Kedia

and Venkatesh Panchapagesan (2011)

4-12 II

29
 T test
P-value
10 10

20.18663 9.79264 36.05372 34.84734 0.12082
10.24108 1.518236 16.56514 16.76087 0.23528

19424197547 13835317023 52504831.6 0 -

4
341.36364 365 28.63636 1 -

4.4

0

4-13


34 34

47.30464 48.80788 37.69333 42.15910
/ 14.41069 4.43884 28.78547 32.31267
218664.7059 0 49452016737 40430700538
0.52941 0 347.52941 365
0 0 0 0
0 0 0 0

34 34

43.81929 39.61174 31.99372 28.60609
/ 17.18794 14.46067 14.01101 10.34193
 3456284.618 0 12865417.35 0
5.02941 0 81.20588 21
0 0 0 0
0 0 0 0
4.4.1
34 34
H0
H1 95%
Z test
P-value 0.05 H0

P-value 0.05 H0

4-14
Z test
P(Z=z)
34 34

47.3046 555.49339 43.81929 527.88876 0.26847
4
14.4106 424.60237 17.18794 307.28494 0.27472
9
4.4.2



H0
H1
95% Z test
P-value 0.05 H0

Amihud and Mendelson (1988) Simi Kedia and Venkatesh
Panchapagesan (2011)


4-15 I
Z test
P(Z=z)

31
 34 34

47.30464 555.4933 37.69333 263.8306 0.02512
9 9 *
14.41069 424.6023 28.78547 312.5664 0.00101
7 0 *

218,664.705 - 49,452,016,73 - -
9 7
0.52941 - 347.52941 - -

H0
H1
95% Z test P-value
0.05 H0 P-value 0.05 H0

34
15

4-16 II
Z test
P(Z=z)
34 34

37.69333 263.8306 31.99372 381.9132 0.095464
9
28.78547 312.5664 14.01101 245.19354 0.0001323
0 9 *

49,452,016,73 - 12,865,417.3 - -
7 5
347.52941 - 81.20588 - -

Amihud and Mendelson (1988)Simi Kedia and Venkatesh Panchapagesan (2011)

5.1

Reinganum1990
3.61
4.066

Papaioannou et al.2003

33


Amihud and
Mendelson (1988)Simi Kedia and Venkatesh Panchapagesan (2011)

5.2

131

35


2002
1 4
2013 10
2016 IPO 4
2014
25 2
20162016 2
2014
74-111
20122012 21
2011
33 2
2010
2010 3
20152015 4
2011 589-612

Barber, B. M., Lyon. J. D. 1996. Detecting abnormal operating performance: The empirical power and
specification of test statistics. Journal of Financial Economics, 41, 359-399.
Christie, W., Huang, R. 1994. Market Structure and Liquidity: A Transactions Data Study of Exchange
Listings. Journal of Financial Intermediation 3, 300-326.
Dharan, B.G., Ikenberry, D.L. 1995. The Long-run negative Drift of Post-listing Stock Returns. Journal of
Finance 50, 1547-1574.
Elyasiani, E, Hauser, S., Lauterbach, B. 2000. Market Response to Liquidity Improvements: Evidence
from exchange Listings. Financial Review 35, 1-14.
Jain, P.K., Kim, J.-C. 2006. Investor Recognition, Liquidity and Exchange Listings in the Reformed
Markets. Financial Management 35, 21-42.
Kadle, G.B., McConnell, J.J. 1994. The effect of Market Segmentation and Liquidity on Asset Prices:
Evidence from Exchange Listings. Journal of Finance 49, 611-636.
Kedia, S., Panchapagesan, V. 2011. Why Do Only Some Nasdaq Firms Switch to the NYSE? Evidence
from Corporate Transactions. Journal of Financial Markets 14, 109-126.
Papaioannou, G.J., Travlos, N.G., Viswanathan, K.G. 2003. The Operating Performance of Firms that
Switch Their Stock Listings. Journal of Financial Research 26, 469-486.
Papaioannou, G.J., Travlos, N.G., Viswanathan, K.G. 2009. Visibility Effects and Timing in Stock Listing
Changes: Evidence from Operating Performance. Quarterly Review of Economics and Finance 49, 357-
377.
Jong-Ho Park, Ki Beom Binh, Kyong Shik Eom. (2012). The Effect of A Listing Switch From A New
Market to A Main Board: Market Macrostructure Evidence. Emerging Markets Review 29 (2016), 246-
273.

37


//

39