Corporate Governance Effect Of Non-tradable Shares Reform

Non-tradable shares reform is an important system reform in our capital market. It solved the problem that the same unit with different rights between the non-circulation stock and current stock, let originally non-circulation stock attend to circulate, thus changing the equity limited circulation situation and realizing the full circulation of stocks. So far, reform of non-tradable shares has basically completed, the result of which has become a hot issue of common concern. According to the research of equity division reform, early mainly concentrated in reform consideration paid, with the development of research, gradually involve investor protection, company profitability and company's market value and so on, but these references paid little attention to some details of equity division reform influence on corporate governance and the behind effect mechanism, based on this, this article from the angle of information mechanism and agent mechanism of the influence on corporate governance, analyses corporate performance and agency cost changes empirically after the reform of non-tradable shares, and research the influence of the game between non-tradable shares and tradable shares in the process of reform on these corporate governance changes. We also analyze the influence of increased mobility on the relationship between shares liquidity and corporate performance after the reform.In fact, the reform directly increases the liquidity of tradable shares, and make the interests of tradable and not tradable shareholders tends to be consistent in corporate governance, which must generate directly or indirectly affect on corporate governance, and the influence, affect what, and how to influence is the main research purposes of this paper. This paper mainly study the following several specific issues. First, the difficulties and problems in the changing process, the relationship between different corporate governance arrange and reform progress, whether the first reform companies in its industry plays an exemplary role; Second, according to the big shareholders utility function, we deduce the optimal occupy proportion of big shareholders; Third, what are the influences of equity division reform having brought to corporate governance and what are the behind influence mechanisms, such as whether the management would receive more supervision and motivation after the changing? Sort interests and operation efficiency of listed company whether there will be significant improved? Whether there will be less big shareholder occupy problem? And the game between non-tradable shares and tradable shares in the process of reform whether has also played a corresponding function etc.This article finds that company with better governance level will have lower big shareholder occupy ratio. Statistically speaking, most of the listed companies' reform occurred in 2006, and the first reform companies in its industry didn't have very good exemplary role. We selected 1138 listed companies from all the listed companies which have finished reform, and we use these listed companies' financial data form 2004 to 2008 forming panel data to compare the performance of listed company before and after changing. This article selects the indicators mainly are company performance indicators, agency cost, and stock fluidity, the index reflecting the changing characteristics and the index reflecting corporate governance features. Empirical results show that equity division reform improved corporate performance, based on this, this paper also analyzes the way in which the reform affect corporate governance, and the results show that there are two aspects, firstly, analyze the way of equity division reform affecting the firm value; Secondly, the influence of variables which reflect the contradiction of tradable shares and non-tradable shares such as tradable shares participation and against degree in the reform process on the corporate governance. Thirdly, research shows that the relationship between shares liquidity and corporate performance is positive, and after changing the positive correlation between shares liquidity and corporate performance is strengthened.Although this paper analyzes the possible way of the reform producing positive effect on the corporate governance, but it is not comprehensive analysis. Because the influences of reform on corporate governance are far more than these, for example, the influence of this reform on dividend distribution policy is also a meaningful research, this aspect is still needs constantly expanding and deepening in the later study.