The Relationship Of Ownership Structure And Firm Performance

This paper first mainly use factor analysis method to evaluate the operating performance of the manufacturing listed company, second we do the empirical research on the correlativity between the ownership structure and coperation performance. This paper use previous experience for reference, dividing equity ownership structure into equity attribute variables and equity concentration attribute variables to explore the mechanism of the shareholding structure on corporate performance from two aspects. Through collecting nine year data of 373 a-share manufacturing listed company of Shanghai and Shenzhen,we use the hybrid panel data model to estimate parameters,and we get the following several conclusions:First, equity attributes have significant impact on company performance. It is mainly reflected in:(1) when the equity attribute is dividied into state-owned shares , corporate shares and tradable share,we find that both corporate shares and tradable share has nonlinear relation with corporate performance.(2) even if we have controled company scale, the asset-liability ratio, Industry benefit, state-owned shares has a negative effect on company performance, this conclusion in accord with Wei et al.(2005). The reason is that compared with private equity, state-owned equity do not have significant advantage in incentive mechanism, supervision motivation, cost reducing and product quality improving(Hart et al.(1997) and Shliefer(1998)), the other reason is the low efficiency of state-owned shares which is caused by their pursuit to the political goal(such as employment, the macroeconomic regulation and control with the stability of society) and their ignorance to the enterprises seeking to maximize shareholder value target(Boycko et al.(1994) and Boycko et al.(F.E.A.(1985), b)).When state-owned shareholding ratio increase to 36% , state-owned shares has a positive impact on the coporate performance, we will owe such results to the full use of government resources. When the proportion of state-owned shares is high , it provides more opportunities for company to financing, mergers, etc, thus to improved performance.(3) increasing the proportion of corporate shares go against corporate performance improvement. From our model regression there is no evidence to prove that corporate performance has positive correlation with corporate shares, this is different from other conclusions.Second, equity concentration has significant influence on company performance. It is Mainly reflected in:(1) with the ownership concentration increasing,there is a positive correlation between the company performance and ownership concentration . we demonstrated in detail the difference between the first big shareholders'and many big shareholders'impact on corporate performance .The results indicate that with the number of shareholders increases, the marginal effects on corporate performance is positive, and many big shareholders'impact on corporate performance is higher than the single big shareholders'(2) the degree of ownership restriction have significant negative effects on corporate performance, when ownership restriction index gets smaller, the corporate performance significantly increases, it confirmes the other shareholders'restriction role to the first largest shareholder, accordingly restricting big shareholders to exploit small shareholders, reducing the "tunnel benefit" role.