Research On The Correlation Between The Equity Structure And Corporation Performance In The Listed Companies With Multiple Controlling Shareholders

Ownership structure plays a fundamental role in terms of corporate governance and therefore is an important factor determining the whole institutional arrangement of corporate governance. As China's security market has not yet matured now and the legal system has not been perfect, highly decentralized equity structure is prone to internal control problems which will exert a negative impact on corporation performance. However, the equity structure of "one dominating stock" is prone to have agent problem between large shareholders and small shareholders. Thus, many scholars suggest establishing the multiple large shareholders equity structure to solve the problem. Weather the sharing of control equity structure has a positive impact on corporation performance or not? Weather concentration equity structure in China is meaningful or not? Weather sharing of control is better than high concentration equity structure or not? This paper attempts to explore these issues through theoretical and empirical studies.At first, this paper establishes a theoretical model with two controlling shareholders as the target company to study the relationship between the sharing of control and corporation value. It gets the conclusion that the corporation value of company with two controlling shareholders is higher than that with only one controlling shareholder, which then extends the conclusion to the company with multiple large shareholders. Secondly, it goes to the empirical studies of sharing of control from two aspects, equity concentration and equity ownership.In the first empirical research, it establishes two corresponding models according to two assumptions, based on 1051 A-share listed companies as sample companies. The two regression results indicate that the corporation performance of companies existing controlling shareholder is better than that with no controlling shareholder's company, and that companies with multiple controlling shareholders will improve the corporation performance. So that equity structure with multiple controlling shareholders will exert a positive influence on the corporation performance. In the second empirical research, it regards companies with multiple controlling shareholders as target companies, divides them to four types according to the equity ownership of the first and second large shareholders, and then does the empirical research. The result shows that the corporation performance of companies with legal entity as controlling shareholders is superior to that of companies with state-owned entity as controlling shareholders. At last, this paper raises some advices. It encourages listed companies to establish corporate shareholders as the main controlling shareholders, reduces the shares of state-owned shareholders and introduces institutional investors to establish the equity structure with multiple controlling shareholders and improve the corporation governance.