An Empirical Research On Ownership Structure And Corporate Value For SMEs

The shareholder structure is the foundation of corporation organization. As the combination of contracts, a company will be directly affected by the biggest shareholders behavior, in its formation of the governance mechanism, the performance, and the value of the company. In2004, the number of companies listed on the Shenzhen SME board has reached537by the end of2010. But China’s securities market mechanisms and institutions are not well developed, especially the lack of protection mechanism of minority shareholders, which is not conducive to the long-term development of SMEs. Therefore, the relationship between shareholding structure of major shareholders and the value of the company will be the core issue in the research field of corporate governance. This article theoretical and empirical research on this issue, and it has an important reference value to enrich and develop the theory of corporate governance, as well as to further promote the reform of SMEs in China.This article based on the reading of home and abroad literatures, makes a full analysis of the basic theory of the ownership structure and corporate value, and explores whether the shareholders dominant position will benefit or barrier the company value. Compared the structure of all the China’s A-share listed companies, and all listed SME companies, this article looks for the particularity of the shareholding structure of SMEs, and studies how the structure impacts on the value of the company.This article studies the relationship between ownership structure and corporate value, from two angles of theoretical analysis and empirical test. It evaluates the relationship also from the point of views of the qualitative and quantitative research. The paper tightly around the analytical framework of ""the SME equity structure-the largest shareholder control (the largest shareholder behavior)-the value of the company". At first, it theoretically discussed the relationship between ownership structure and corporate value, sort out the logical relationship of the largest shareholder’s incentives, supervision management, investment behavior, and proxy contest. And then, the paper makes an empirical analysis of the relationship between the value of the company and the share holding structure of China’s small and medium-sized listed companies. It researches the relationship of major shareholders and company value, mainly from the angle of concentration of ownership and equity balance.