Research On The Performance Of China's Family Listed Companies On The Basis Of The Internal Governance Structures

As the continuous development of China's economy, the growth of family business has attracted more and more attention, and it has become the leading factor in our national economy. Numerous researches indicate that the effectiveness of corporate governance structures has an important impact on the vicissitudes of enterprises. And for the family business, it has unique and complex corporate governance structure relative to other enterprises. Therefore, how the family business enhances its management efficiency and corporate value by improving the governance structure has achieved academic and practical attention. In the article, given the availability of data, the author takes the family listed companies as study samples to research the relationship between their internal governance structures and corporate performances from both theoretical and empirical aspects, and tries to make policy recommendations.First of all, this article analyses the characteristics of the management structure of family business from the changes in its internal governance structure. Subsequently, the author researches the key factors one by one which effect the transformation of the family listed companies' internal governance structure. And on this basis, its affection on the efficiency of corporate governance and corporate performance of China's family listed companies is analyzed. In general, these factors include the way which family business chooses to list, different ownership structure and related control of family business, its modal of board of directors, the introduction of external managers, as well as the validity of external control market.On the basis of theoretical analysis, the article uses the measurement method of liner regression to research the relationship between the relevant factors of internal governance structure and its performance empirically. For performance variable, the indexes of earnings per share, return on equity and operating margin which are representative and universal applicability are selected. For the internal management structure variables, five explanatory variables have been chosen, including the proportion of the shares of the largest shareholders, the proportion of top ten shareholding, the proportion of managers' shares, the ratio of independent directors and whether the position of chairman and general manager is held by one family member. Descriptive statistics and regression analysis of measurement results show that except the fifth explanatory variable has negative correlation with corporate performance, all of other internal governance structure factors have positive relationship with performance. However, empirical result of multiple linear regression shows that the index of the proportion of managers' shares and the ratio of independent directors have uncertain impact on its performance. This result is partly explained by our imperfect system of independent directors and management incentives.According to the conclusions of theoretical analysis and empirical tests, the author makes some recommendations from the point of view of how to improve family listed companies' internal governance structure related with China's actual situation, including improving the system of professional managers, improving the system of independent directors, and optimizing the ownership structure of family listed companies, and so on. What's more, from the external governance environment, the efficiency of information disclosure regulation and external control market also should be strengthened, which have indirect impact on the optimization of family listed companies' internal governance structure and enhancement of the performance.