Research On The Market Response To The Behavior Of Controlling Shareholders' Propping

Presently, big shareholders can't play the role of supervision and management in China but damage small and medium shareholders' interests to some extent as well as most countries in the world because of relatively concentrated equity. According to researches, propping and tunneling are not contradictory. However, under some special conditions, such as on the condition that the big shareholders tend to support listed companies to keep the listed company's shell resources or to meet the needs of allotment of shares when the listed company is in financial difficulties. So investors will regain their confidence to the listed company, and then affect stock prices. Based on the analysis, this paper discussed the related theory of the market response to the behavior of controlling shareholders'propping. Specifically, take the financial management theory and enterprise management theory as the guide, and the listed companies'data in China as the foundation, advanced applied statistics as method, , analyzed the influencing factors which effect the market response to the controlling shareholders'propping and the of the extent of propping through the theoretical analysis and empirical research. Therefore, this paper has important significance for protecting the medium and small shareholders'benefit, and improving management efficiency.First of all, this paper analyzed the means and motive of the behavior of controlling shareholders'propping, summarized systematically related theory of yield of control rights about the controlling shareholders'propping, pyramid ownership structure theory, and then combined the theories and the controlling shareholders to form the theoretical foundation as theoretical support and guidance for the follow-up studies.Then, this paper made empirical analysis on the market reaction on the controlling shareholders'propping behavior. According to the theoretical analysis, it put forward relevant hypothesis and used event study and regression analysis. Starting from the whole market reaction, it contrasted the different market reaction under different propping ways to research the rule of the controlling shareholder support behavior. And then analyzed the relationship between the controlling shareholder propping degree and the proportion of the first largest shareholder, equity concentration, asset-liability ratio, enterprise scale, and got the conclusion which verified the assumption about the market reaction and the extent of support behavior.Finally, this paper analyzed the results of the empirical results, and made explain using the relevant theory. Considering the actual situation of China's listed companies, policies and suggestions are given from the three angles of government, public companies, to enhance practicality of the research.