Research On The Relationships Between Ultimate Controlling Shareholders,debt Financing And Corporate Performance

Since 90's of the twentieth Century,scholars represented by LLSV found that the ownership are not isolated with control rights,but highly concentrated.Chinese listed companies generally have ultimate controlling shareholders.Thus,revealing the different agency conflicts and the impacts of the ultimate controlling shareholder in the pyramid structure on corporate performance,and studying decisive solutions of the specific ownership structure to debt financing become the important problem of modern corporation financial theory and practice.This paper takes Chinese listed companies in 2011-2013 as example.On the basis of domestic and foreign relevant theories and empirical results,using the research method of theory analysis and empirical analysis,combining with the views of ultimate controlling shareholder,from the two dimensions of ownership structure and debt structure,the paper analyses the ultimate controlling shareholders and debt financing on the impacts of the corporate performance with comprehensive and systemic ways and draws some conclusions.The conclusions will do good to protect the benefits of the medium and small shareholders and the creditors,improve the corporate governance mechanisms,and have important theoretical and practical significance to promote the healthy development of the listed companies.In the theoretical analysis,the paper discusses the historical evolution of pyramid ownership structure of state-owned listed corporation and private listed corporation,combined with Chinese reality in the capital market of transitional economy.We can see the institutional background of state-owned and private pyramid ownership structure is different.This will influence the debt financing and tunneling method.In empirical analysis,according to the theoretical analysis to put forward the hypothesis through panel data of collected sample companies,the paper established synthesis model of the ultimate controlling shareholders,debt financing and corporate performance.Firstly,the paper examined that the characteristics of ultimate controlling shareholder of state-owned and private listed corporation has the influence on capital structure and debt maturity structure.This paper research mainly from the three aspects,1)the relationship between control characteristic such as the ultimate control right and the ultimate cash flow rights,etc and the proportion of debt financing and debt maturity structure;2)the relationship between type characteristic such as state-owned and private ownership type,etc and the proportion of debt financing and debt maturity structure,3)the relationship betweenbackground such as age and background,etc and.the proportion of debt financing and debt maturity structure.Then,the paper researches the effect of ultimate vote rights,ultimate cash rights,etc on corporate performance.According to the ownership nature of the ultimate controlling shareholders,the listed Corporation is divided into state-owned and private listed Corporation,this paper carries out a comparative group study The results show that: the ultimate vote right,the ultimate cash right and so on can have an important impact on the corporate performance.The separation degree of ultimate vote rights and cash rights of private listed corporation is higher than that of state-owned listed corporation,and its negative effect on the corporate performance is more obvious.Finally,in pyramid ownership structure,from the point of view of ultimate controlling shareholders,the paper analyzes the impact of two aspects of the capital structure and debt maturity structure of debt financing on corporate performance.The results show that: under different type of ultimate control rights,governance effective level of debt financing is not same,that is the type of ultimate controlling shareholders has an effect on debt financing.Short term debt can restrain behaviors of private ultimate controlling shareholders;short-term debt ratio is not significant relevance with corporate value of state-owned listed corporation.The theoretical analysis and empirical research evidence indicates that how to effectively restrain the ultimate controlling shareholders' "tunneling" becomes an important problem of the modern corporation governance,the key is to limit the over power expansion of the ultimate controlling shareholder,limit the degree of separation,prevent the formation of excessive control.In order to solve the problem,on the one hand we should in the company implement the reasonable distribution of powers and keep balances,and improve the mechanisms of the ability of medium and small shareholders and creditors to participate in decision making.On the other hand we should outside the company increase the transparency of information disclosure,strengthen legal supervisions.