Research On Relationship Between Balance Mechanism Of Shareholding And Private Benefit Of Corporate Control In Listed Companies

With the deepening of governance theory, people have pay a lot attention on the corporate governance issue:major shareholder(the largest shareholder)in the corporate governance role and influence. Governance issues have been transferred from the first class of agents to the second class of agents issues, namely, agent problems between large shareholders and small shareholders.Major shareholder use their advantage to against the interests of minority shareholders resulting in a "private benefits of control" problem.This paper reviews the literature systematically at home and abroad and discusses equity theory of checks and balance in detail.At the basis of that, the paper discusses the relationship between balance mechanmism of corporate control.And on the basis of previous studies, the paper selects listed companies which satisfy the transfer of control as samples between 2004 and 2009 from the Shanghai and Shenzhen stock exchange to measure the level of private benefits.It also use the methold of empirical analysis to test the relationship between the two and draw the following conclusion:the ratio of the largest shareholding is higher, the private benefits of control is greater; the existence of the second largest sharehold can not inhibit the major shareholder of private benefits of control;equity checks and balances can effectively inhibit the major shareholders to obtain private benefits of control;the larger company and higher proportion of shares are more beneficial to inhibit the private benefits of control.To solve the above problems,the listed company should take two ways to constraint the private benefits of control from both internal and external of company. To the internal of listed company, establish a number of checks and balances between the major shareholder governance structure; To the external of listed company, strengthen capital market legal and institution building and so on. To some extent,it can constraint violations of minority shareholders benefits and safeguard the interests of small and medium-sized shareholders and ensuring healthy and stable development the securities markets.