The Relationship Between Ownership Concentration And Corporate Performance In The Family Owned Listed-company

As a important element of corporate governance variable, ownership concentration has always been the focus of academe. There are three views of scholars to the relationship between ownership concentration and corporate performance: does not matter ; U or inverted U-type relationship; linear relationship. Based on analyzing the characteristic of the family owned listed-company , we can divided it into monopoly, oligopoly, competitive mode, and discuss the relationship between the behavior and the corporate performance under these three listed-company mode. We find that, First , the largest shareholder can effectively monitor manager's selfish behavior under monopoly ownership structure, but he also has motivation to invade the interest of the minority shares , and its ability is related to the size of asset and the portion of traded shares. Besides, the largest shareholder may invade the interest with the creditors. Second, the cost to supervise the manager under oligopoly ownership structure is higher than the competitive one. It may provide room for the manager to innovate and prove the performance of the family listed-company under the game result of several major shares, who compete or ally with each other. Third, the shareholder is negative to supervise the manager and that would increase the manager's agent costs and lower the performance of corporate under competitive ownership structure. There is"union effect"and"barrier effect"if the manager have shares, and the creditor tend to give these company lower interest. Based on the theoretical analysis we can know that there is a obvious cubic relationship between ownership concentration and performance of corporate. we can also know that there is a negative relation between the portion of traded shares and the performance of corporate, which still exist between the assets-liabilities ratio and performance of corporate. Besides, asset size and equity balance are positive to corporate performance. Overall, ownership concentration has limitation to explain the corporate's performance, how to establish a total function between corporate governance variables and corporate performance is still worth studying.