The Research On Controlling Shareholders' Agency Costs Problem

Recently some scholars have found the stock rights of most countries' firm are not disperse but quite convergence except of some few countries such as America and England. The disperse of controlling shareholders' stock rights results in another agency problem which minority shareholders are aggrieved by controlling shareholders. The controlling shareholders may use various means that is treasure occupied and dividend distribution in order to plunder the minority shareholders. The article analyzes the agency problem of controlling shareholders (APCS) and minority shareholders to post the degree of the expropriation by the treasure occupied and dividends distribution in China's listed companies. The research improves the comprehension of this problem and contributes to enhancing the corporate governance.The thesis surveys the academic researches on the agency problem of controlling (APCS) which is based on internal and external actuality summarization. It also expounds the reason, forms and affected factors of the agency problem of controlling shareholder. The article focuses on the research of benefit expropriation by treasure occupied and dividends distribution in the empirical research part, then analyzes the infection to controlling shareholders' agency cost of some corporate governance mechanisms related with the controlling shareholders. The agency costs of controlling shareholders are measured by the industry average pay produced by the occupied treasure in the empirical research part of treasure occupied. It shows that firms with controlling shareholder have higher agency costs than firms without controlling shareholder. The controlling shareholder increase the expropriations by appointing senior managers of the listed company;the size and the leverage of the company positively are correlated to the controlling shareholders' agency costs. In the empirical research part of dividends distribution, the agency cost of dividends distribution is measured by the different yield between the shareholders. The results show that the agency costs are positively correlated with thepercentage of the shares being held by controlling shareholder and appointing senior managers also strengthens the degree of minority shareholders. The chief managers holding stocks restrict the controlling shareholders' expropriation by dividends distribution on some degree. Satisfying the condition of the capital issue is one of the factors thought by the controlling share when distributing the dividends.