Research On The Relations Between Major Shareholders' Tunneling, Propping And Profitability Of Listed Companies

Corporate governance research has been a world hot topic in recent years. Especially after Asian financial crisis, it could be found out that the level of corporate governance is very low in developing countries and emerging market countries, at the same time, highly concentrated shareholding structure become a general case. With the appearance of tunneling and propping brought up by Johnson and Friedman et al., more and more scholars had paid attentions to this phenomenon. The phenomenon of major shareholders taking up capitals universally exists in China. This has been an obstacle of listed companies' development. Many companies have been delisted because of this, on the other hand, minority shareholders' rights can not be protected. The significance of the research on the relations between tunneling, propping and profitability of listed companies is huge. Not only because the development of corporate governance is very important in developing countries, but also it will cover the shortage of the research on each part of major shareholders' behaviors.This article is divided into five parts, the first part introduces the research background, significance and research methods, summarizing scholars' views all over the world. The second part is the theoretical research and the definition of key words. In the described three basic theories, the principal-agent theory, asymmetric information theory and theory of control right of capital structure, the paper defines the related concepts of key words appeared in the article. The third part is the situation analysis and relationship analysis part. On the descriptive statistics and correlation analysis of the recent situation of major shareholders'behaviors and profitability of A shares of non-financial listed companies in China, the paper analyzes the relationship between major shareholders' behaviors and the profitability of listed companies theoretically. The fourth part is the empirical analysis. It chooses newest samples and variable indicates to construct multivariate linear model, and analyzes the relations between the dependent variable and the independent variable by using the SPSS statistical software. The empirical result shows that there is significant negative correlation between major shareholders' tunneling and profitability of listed companies, while there is significant positive correlation between major shareholders' propping and profitability of listed companies. The last part outlines the conclusions of this paper, makes relevant policy recommendations. on problems and discusses future research direction.The characteristic and innovation is to study the relations between major shareholders' tunneling, propping and profitability of listed companies from new perspective. Not only it will make up the non-separated integrity of previous studies, but also it creates a combined analysis between performance evaluation indexes and major shareholders' behaviors. At the same time, it chooses the newest A shares of non-financial listed companies in our country. With the descriptive statistics analysis of major shareholders' behaviors,it chooses different profitability indexes to carry out an analysis between major shareholders'behaviors and profitability of listed companies from all aspects. On the basis of that, it constructs multivariate linear model to analyze the relations between major shareholders' tunneling, propping and profitability of listed companies and makes some relevant recommendations. The research will help perfect corporate governance structure and raise the profitability of listed companies in our country.