Research On Ultimate Ownership Structure And Corporate Performance In Post Non-tradable Share Reform Era

Ownership structure is the fundamental problem on corporate governance study. Ownership structure, refer to the portfolio of the company's total share capital holding by different nature of the company's owners. The company's ownership structure determines the control of the company distribution among the shareholders, to determine the shareholders in the company's internal decision-making discourse and decision-making, and ultimately will affect the company's performance level. Recent years, domestic and foreign scholars have made in-depth discussion on relationship between ownership structure and corporate performance. La Porta, Lopez-de-Silanes & Shleifer (1999) groundbreaking retrospective shareholders of listed companies through the control chain to identify the ultimate controlling shareholder of the research paradigm, making the ownership structure and performance of the company into a new period.Split share structure reform is a milestone event of China's securities market development, split share structure reform makes changes of certain company shares flow properties and result in a significant proportion of shareholding changes occurred. What impact will be on changing the ownership structure to the listed company's financial decision-making behavior? What's the final impact of these changes will ultimately look like for the company performance? Is there any optimal ownership structure existing in the current listed companies? This thesis will focus on study and try to find some answer for the above questions. This thesis is based on the ultimate control over the content under the ownership structure and corporate performance relationship between the controlling shareholders with ultimate control of the ratio of degree of separation of ownership and the degree of checks and balances to measure the equity ownership structure of listed companies, grouping the different nature of empirical test level, during the ultimate controller of the listed company's financial decision-making, agency costs, and company performance. Conclusions of this thesis are as follows:1. In the study of the ultimate ownership structure and capital structure's relationship, it was found that state-owned property's ultimate control over the proportion of listed companies has a significant negative impact on the asset-liability ratio, and the share reform has not changed this connection, but in the separate group test it. was found that companies with controlling shareholders still shows negative impact during the period of post-split share structure; however, negative impact during the period of year 04-06 for post-split share structure becomes not significant for those non state-owned property companies.2. In the study of the relationship between ultimate ownership structure and investment decision making, it was found that, state-owned properties and non-state properties of the overall sample, the ultimate control over the capital expenditure ratio has significantly negative impact, but we also found that this connection does not always exist in the further research in separate group test. Separation of ownership and the degree of state-owned property for the impact of capital expenditure has been in year 04-09 period was not significant, but the results of testing in the group vary widely. 3. In the study of the ultimate ownership structure influence to the cash dividend research, it was found that, among of state-owned properties and non-state properties of the overall sample, ultimate control over the proportion of listed companies has a significant negative impact on the cash dividend ratio, in the period of year 04-09. But we also found that this connection does not always exist in the further research of state-owned properties separate group test. Ownership structure level of equity and balance basically shows significant positive influence to the cash dividend.4. In the study of the relationship between ultimate ownership structure and agency costs between shareholders, it was found that ultimate control over the proportion of listed companies has a significant negative impact on the agency costs between shareholders of the state-owned properties. But contra finding shows in the group testing that physically result was is significantly positive. Non-state property in year 04-06 with the rise in the proportion of control agency costs will also increase respectively, in the post-split share period it shows significantly negative impact then. Despite on equity or balance in terms of separation of ownership of view, non state-owned listed companies occupy a strong motivation for the interests of minority shareholders, but to the state-owned property companies have not found similar evidence.5. In the study of the ultimate ownership structure influence to the agency costs between shareholders and managers, it was found that, state-owned property company in the test sample as a whole, the ultimate control over the selling and administrative expense ratio on the rate of converse from positive to negative after period of post-split share. However, there has no evidence on ultimate controlling shareholder on play effective role to supervise the management team from the separate group test result.6. We expand from two aspect, financial performance and market performance in the study the ultimate ownership structure on corporate performance. The ultimate relationship between ownership structure in Post non-tradable share reform era and financial performance for the state-owned property company shows a significant inverted U-emergence of the optimal holding structure; further group test shows the optimal result for companies with controlling shareholders (as opposed to holding and the absolute majority of shares) in post non-tradable share reform era. In addition, the study also found that, either the former or the latter, stock checks and balances ratio has been showing a significant positive influence for the financial performance. In the study of the impact of market performance, we found that the proportion of ultimate control of state-owned property company shows significant U-shaped relationship with Tobin'Q, which is opposite to the impact of financial performance from the group test results. The degree of checks and balances in the equity market performance impact on the results are consistent, emerged as a significant positive relationship.Through the proceeding conclusion, two important revelations can be implied with respect to state-owned property and non-listed state-owned property:First, in the post-split-share period, the listed company ownership state-owned-property structure is the optimal structure, the balancing effect in the role of the second largest shareholder in terms of corporate performance is positive, and no evidence indicates that the increase in proportion of shareholders in state-owned listed companies will enhance the motivation of undermining a higher proportion of small shareholders'interests. Therefore, to supervise and support the state-owned property companies, more focus should be put on balancing the equity right of the majority shareholder, rather than overly concerned with the activities that undermine the interests of minority shareholders.Secondly, in the period of post-split-share, there is a positive relation between the percentage of non-state properties of the controlling shareholder's ownership and financial performance, and balancing the equities of non-state property of the company has a similar effect. However, there is evidence indicates that the impact of balancing shareholder equity on agency cost is positive, and it is possible that the major shareholders may collude to exploit the interests of minority shareholders. The more the degree of separation of ownership, the greater agency costs between shareholders. However this effect doesn't happen to listed in state-owned property companies.The innovation of this paper is three fold:Firstly, it established the theoretical system of "ownership structure-financial decision-making-firm performance," thoroughly taking into account the impact on corporate performance from two types of agency costs (agency costs of managers and shareholders, and the agency costs among shareholders.Secondly, it established the research framework of "characteristic-ratio-period" grouping empirical analysis, thus refining the course of study, making empirical results more accurate, and avoiding the possibility that some useful information was concealed by averaging population sample.Thirdly, new evidence was found through empirical research of the ultimate relationship of the post-split share between ownership structure and corporate performance. The study found that in the period after the split share structure, the state-owned listed companies appeared the optimal ownership structure, and played an active role in balancing the level of equity performance for the companies. However the ultimate controlling shareholders of the non-state-owned listed companies tend be in favor of the minority shareholders'interests, which is not found in state-owned property companies. These related findings enrich the content of domestic ownership structure, and provide the regulators with helpful information.