Study On The Relationship Between Actual Controller’s Characteristics And Enterprise Value Of The Listed Family Companies In China

As a form of economic organization, the family business has a long history to trace and long time to flourish which not only occupies a fundamental position in the pan-East Asian countries and regions with strong family values, but also an important pole in the developed market economy countries such as the Europe and the United States which is respect for individual rationality, relatively standardized and in smooth information delivery channel. With the reform and opening policies going further and continuous introduction of the policy about national support for the development of private enterprises as well as the establishment of the SME and GEM board financing platform, the family business obtains a leap development so that more and more family businesses begin listing in China. The actual controller who has a core influence in activities of the family business directly or indirectly affects the development of the family business, so this study has a great practical significance from the point view of the actual controller.In this paper, firstly we adopt broad definition of the family business which is quoted from Chinese family business report in2011. Secondly, we have the samples from2009to2011listed in the Shanghai and Shenzhen Stock Exchange of family business. Thirdly, we use principal component analysis and factor analysis to measure enterprise value. Finally, we explore influence such actual controller’s characteristics as the way of its formation, ownership structure, positions holding and the future of control transfer on enterprise value.Through the establishment of a multiple linear regression model and SPSS17.0statistical software, we conclude that by empirical analysis:the first, the way of actual controller’s formation is significantly correlated with the value of listed family companies, that is to say, formatted directly through the IPO is more conducive to enhancing corporate value than buyshell; the second, actual controller’s degree of separation of control rights as well as cash How rights and the length of control chain(level) shows negative correlation with the enterprise value, furthermore, combined with formation style, the more serious the adverse impact on enterprise value by the separation degree when formatted through buyshell; the third, the proportion of actual controller’s stock presents inverted U-shaped structure with enterprise value; the forth, actual controller holds a concurrent post of the CEO who could promote the enhancement of corporate value in listed family companies; the fifth, whether actual controller is the first generation of entrepreneurs has positively correlated with enterprise value but not significantly.Based on the analysis, we advice that China should affirm the actual controller’s positive influence on the family business to encourage the IPO, optimize the shareholding structure of the listed family companies and improve the external government environment as well as the investors’interests with protection mechanism in order to protect the interests of minority shareholders.