An Empirical Study On The Influence Of The Listed Family Businesses' Corporate Governance On Agency Costs

Rapid development of listed family businesses, has become an important economic power in China. The listed family businesses has characteristics of both the family businesses and the modern enterprises, resulting in a unique dual three-tier principal-agent problem—agency problems between family controlling shareholders and small shareholders, between the family shareholders and family managers, between family shareholders and the external managers . Because lacking of an effective external governance mechanisms and regulatory mechanisms in China, the first category of agent of family businesses has becoming popular to discuss in the academic field.Based on the theory of principal-agent and the altruism,this paper studies the relationship between the governance structure and the first category agency costs of listed family businesses with the theoretical and empirical research. The purpose of this study is to attempt to answer the below question: how to measure the listed family businesses'agency cost exactly? How the governance structure impact the agency costs in the listed family businesses? what kind of governance structure can effectively reduce the Agent Cost of the listed family businesses in China?This paper uses 766 listed family businesses of China in 2007,2008 as a research sample to study the relationship of family cash flow rights, board size, the proportion of family directors, family management style, The proportion of executives holding with the management expense ratio (agency cost). The results show that the family cash-flow rights, the proportion of family directors, family management model, The proportion of executives holding have a negative correlation with agency costs, then,board size and agency costs are significantly positive correlation. Finally, based on empirical results of this study, this paper proposed some suggestions, hoping to help optimize the governance structure of listed family businesses to ease the principal-agent conflict, reduce agency costs and promote the healthy development of family businesses.