A Research On The Relationship Between Ownership Structure And Minority Investor Protection Of Private Listed Companies In China

Nowadays it is in the period of marketization evolvement of Chinese economy. With the rapid development of the economy in the private sector, listed firms from the private sector have become a important part in the capital market and are having great influence toward the development of the national economy. Nevertheless, under the institutional environment of our country, because the market mechanisms to protect minority investors are not perfect and mechanisms to hold down the expropriation of minority shareholders by controlling shareholders haven't been constructed foully, controlling shareholder often tunnel listed companies and minority shareholders through many kinds of ways. Among the ways of tunneling, embezzling funds of listed companies is a characteristic way which has impeded our country's securities market's development. The pyramid control structure widely exists in Chinese privately controlled listed companies in comparison with the state controlled listed companies, controlling shareholders of privately controlled listed companies have stronger incentives to expropriate outsider investors than those of state controlled listed companies. Under the pyramid control structure, the stronger motive of controlling shareholder to gaining the income of controlling and the greater harm to the interests of its small shareholders.This paper, starting form researching ownership structure efficiency of in china, studies the cause of agency, conflicts between controlling shareholder and minority shareholders in the frame of strengthening the mechanisms to protect minority investors, guiding all the models and relevant empirical studies. We study the problem of investor protection from one perspective of microscopic scale of corporate governance and from another perspective of macroscopic scale of institutional environment. We adopt academic and empirical ways in this paper. After the retrospective of some related documents both at home and abroad and the analysis of basic theories, we put forward the hypothesis that the ownership structure has relevance to the minority investor protection. This paper consists of five chapters. The first chapter is preface. The second chapter is the literature review and summary of previous research on ownership structure and the minority investor protection. Chapter Three analyses the ownership structure and the minority investor protection from the private sector by the angle of the influence caused by ownership structure. Chapter Four is empirical analysis. Chapter five advances the conclusion on the basis of the result from theoretical and empirical analysis and addresses some advice. The core conclusion of the paper shows that ownership structure has relevance to the minority investor protection which is measured with embezzling funds and corporate performance in Chinese privately controlled listed companies. Finally, combining analysis with conclusions mentioned above, we take some countermeasures to improve and perfect the minority investor protection institution so as to decrease the agency conflicts between controlling shareholder and minority shareholders, and protect investors better.