Study On The Relationship Between Share Proportion And Tuneling Of Listed Companies

Because of the unique system of background, listed companies exit in a serious acts of tunneling.These systems of background includs illogical ownership structure, distemperedness of legal system, lacking of internal checks and balances of power,and lacking of exterior supervise. After summing up the system limitation, we explore the tunneling mechanism.In the full understanding of the essence of the tunneling, it is designed the two theoretical model in order to quest for the relation between in ownership structure and the behaviors of tunneling. We draw the following conclusions in the first model:whether the second largest shareholders supervise the controllers or not, the other shareholders will not supervise the controllers, then the controllers are only supervised by the second largest shareholders; the higher of the share proportion of the second largest shareholders is, the higher of degree of the second largest shareholders'supervisal is, then the degree of tunneling is lower. So the share proportion of the second largest shareholders is increased, it can improve the supervisal to the controllers and reduce the tunneling of the controllers. We draw the following conclusions in the second model:if shares are transfered from a shareholders of lower share proportion to a shareholders of higher share proportion,it can reduce the degree of tunneling;with increaning the shares which is transfered,it can increase the degree of reducing tunneling and enhance the speed; when shares are transfered from a shareholders of lower share proportion to a shareholders of higher share proportion,the lower of the share proportion of the shareholders who holds less shares is,the greater of the degree of the reduction of tunneling is; the higher of the share proportion of the shareholders who holds more shares is,the greater of the degree of the reduction of tunneling is; with the largest shareholders enhancing share proportion,firstly the acts of tunneling increase,after redue;if it doesn,t influence the degree of surpvisal when the share proportion of the largest shareholders is changed, with the largest shareholders enhancing share proportion,firstly the degree of tunneling increase,after redue.According to the conclusion of the second model the emprical model is designed.And it supports the conclusion of the second model when it is tested with the data of Chinese listed companis.On the basis of the front plentiful researchs,suggestions of reducing tunneling are proposed in the paper.