Ultimate Control, Reduction Of Major Shareholders, And Corporate Value

Since 2005,the share reform have carried on steadily. The original non-tradable shares have obtained circulation,that is restricted shares lifting the ban. With the continuous increase in outstanding shares,the phenomenon of the shareholders selling their shares comes into sight. In the secondary market,major shareholders sell their shares one after another. What kind of impact on the company will this "reduction of boom" have in the end? In this paper,take main board listed company of Shanghai and Shenzhen A shares in 2007-2009 as a sample,and from the perspective of ultimate control,it will study the impact on corporate value by reduction of major shareholders. The results shows that the behavior of reduction of the different nature of the ultimate controller will have different effects on corporate value. It is specifically said that the reduction of the controlling shareholder of the government control company will promote the corporate value. And the lower the levels of government is,the more obvious this effect is. That is,the greater the reduction ratio is,the greater the value of the company is. But the impact on the non-government control company by the reduction of the controlling shareholder is not obvious. This provide a little help to study how the major shareholders of listed companies in China should take the reduction strategy to avoid taking adverse effects on listed companies due to the reduction of major shareholders, and enhance the corporate value in future.