Research On The Check-and-Balance Ownership Structure And The Value Of Chinese Listed Companies

In modern corporate governance, in addition to the agent conflict between the shareholders and professional managers which is stated by Berle and Means in 1932, actually there is another serious one, which is existed between large shareholders and external scattered minority shareholders. This agent conflict is particularly serious in the Chinese Securities Market, which was developed under the special economic background. The harming behavior of large shareholders to the listed companies and minority shareholders has become a chronic disease, as the immediate consequence is not only seriously disserving the survival and development of listed companies, but also restricting the healthy development of the securities market and threatening the financial security. Therefore, how to effectively restrain the harming behavior of large shareholders, has become a new problem in theoretical studies on corporate governance.The foreign researches on the theory of check-and-balance ownership structure have provided a useful inspiration to solve this dilemma. This paper intends to make an approach to the restricted effect by systematic studying on the relationship between the check-and-balance ownership structure and corporate value. It also tries to find a reasonable form of check-and-balance ownership structure, in order to lay a theoretical foundation and put forward some policy recommendations to solve the chronic disease and improve the corporate governance of our listed companies. Based on a review of studies around the world, this paper theoretically analyses the relationship between the check-and-balance ownership structure and corporate value, then it empirically examines the results of the theoretical analysis by using the raw data of our listed companies. Both the results of theoretical analysis and empirical examination show that a reasonable check-and-balance ownership structure should take 3 to 5 large shareholders as suitable, and the shares held by the largest shareholder should be more than the others, but be less than their sum, which represents as the largest shareholder is unitedly restrained by the others. It plays an positive role in protecting the listed companies by equity restriction, as well as to avoid negative consequences. Finally, the paper briefly discusses the method of constructing reasonable check-and-balance ownership structure and proposes five policy recommendations, in order to advance the establishment of reasonable check-and-balance ownership structure gradually and insure it work effectively in our listed companies.