The Agency Costs Research Between Controlling Shareholders And Minority Shareholders In The Listed Companies

Agency cost theory is one of most important theory in the corporate governance of listed company. In early years, the research for the agency cost problem studying the management of listed companies is between shareholders and corporate agency costs. However, as the listed companies reforming the ownership structure, the controlling shareholder and minority shareholders have become increasingly intensified. Controlling shareholders use their right which can vote and control the company to get much more money from the minority shareholders in the board of director and board of supervisor. On one hand, controlling shareholders usually choose the decisions basis on their own interest. So the decisions may not be the best ones for the companies. The results of the decision will increase the costs and reduce the income. On the other hand, the controlling shareholder of listed companies will increase consumption through a variety of additional revenue. Controlling shareholders will use two methods against the interests of small shareholders. More and more scholars at home and abroad have interesting in studying the Agency cost between controlling shareholders and minority shareholders.Respected to Western capital markets and mature listed companies, evidence of agency cost theory is relatively earlier. However, due to Chinese capital market developing too late, the listed companies also have a certain particularity that listed companies in China are generally set up by joint-stock reform of state-owned enterprises, so the more perfect the Western model of governance for listed companies do not for the Chinese companies. As a result, our domestic scholars study our companies and make model based on the Western theory and the features of our own listed companies. This article is based on domestic and foreign scholars, an empirical model of the size of the agency problem between shareholders.Firstly, the paper introduce the agency cost theory from the corporate governance theory and agency cost theory of the size of the shareholders, mainly on the root causes of the agency cost theory, how to produce agency cost of the shareholders. Second, by introducing structure of listed companies in China currently leads the characteristics of ownership structure of listed companies. Then we will try to fond out how the controlling shareholders to make the benefits from the minority shareholders in listed companies and produce this agency cost reasons. Next, after choosing the data from2005 to 2009, we will find out same companies that used to exchange large equity. We try to get the private benefits of control which can indirectly show agency costs between controlling and minority shareholders. Finally, the empirical results show the impact of the agency costs are ROE, company size, tradable ratio size , Asset-liability radio, controlling shareholding radio and so on. At last, we will give some strategies and comments for listed companies following the results. We can fond them in both internal environment and external environment.