| La Porta,Lopez-de-Silanes and Shleifer had analyzed the agency problem between controlling shareholders and minority shareholders through tracing backto ultimate controllers in 1999.After that,many studies showed that ultimate controllers'control is a basic character of the internal mechanism of corporate governance. It not only decided the distribution pattern of companies'residual claim right and residual control right,but also impacted companies'financial decision. And companies'capital structure would be affected inevitably.Based on the structure of ultimate controllers,this paper studied the influence of ultimate control right on companies,taking capital structure as object. In the companies with ultimate controllers,ultimate controllers would control companies through establishing pyramid ownership structure and cross-shareholding system. It resulted that control right deviated from cash flow right. Then ultimate controllers could control the whole companies and infringe minor shareholders'benefits. Using 1684 sample listed companies in shanghai stock exchange in 2007,this paper established the indicator of deviation degree between cash flow right and ultimate control right,found the ultimate controllers'situation in listed companies,verified the relationship between ultimate control right and capital structure choice.The study showed that the existence of ultimate controller was due to incomplete contract,and companies'residual control right could be controlled further by ultimate controllers through board of directors. From the empirical data of China's listed companies,it did exist ultimate controllers in China and they controlled companies through the pyramid ownership structure. From the capital structure choice of ultimate controllers,ultimate controllers main considered no dilution of equity in liability and the structure of board of directors also impacted the capital structure choice. |
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