Emirical Study On The Infulence Of The Major Shareholder’s Increasing And Decreasing Behavior Upon The Company Value

After reforming had basically completed, China’s stock market began toenter into the full circulation time. Due to limited sales of listed company’sshares has into circulation, the way to calculate the value of the first majorityshareholder has also changed, so has their behaviors. It occurs that theshareholders’ increase and decrease stock behaviors appeared frequently on thecirculation market. With the increase and decrease shareholding behaviorsoccurring,it brings a lot of questions that seriously influence the stabledevelopment of the capital market and the fairness of the trade in our country.Therefore, it is necessary to learn the further study of the major shareholdersincrease or decrease behavior situation and major shareholders increase and themechanism of how the increase or decrease shareholding behavior affects thecompany value. Through reviewing the literature and theoretical explanation,this paper makes a study of the different economic consequences to the majorshareholders’ increase or decrease stock behaviors in different natures of equityand ownership concentration. Through an empirical research, the paper found outwhether and how the big shareholders’ increasing and decreasing stock behavioraffect the company value, and the influence degree of change in different cases.According to the result of empirical research and the actual situation, the paperput forward the suggestions and policy to investors, management and supervisiondepartments.This paper analyses the major shareholders’ increasing or decreasing stockbehavior theoretically and empirically. In the theory of analysis, this paperexpounds two effects that the major shareholders’ increasing or decreasing stockbehavior influences the value of company. From the basic theory of the bigshareholders’ behavior, it explains the mechanism of which the majorshareholders’ increasing stock behavior takes the corporate value with the signaltransmission theory and industry effect theory, and explains the mechanism ofwhich the major shareholders’ decreasing stock behavior takes the corporatevalue with the aid of the principal-agent theory and corporate governance theory.This paper uses regression method and respectively and layered regressionmethod in the empirical analysis. After processing664samples from2008to2010which meet the conditions, the processing result is: in the condition ofstate-owned properties, the major shareholders’ increasing stock behavior does not affect the company value. While in the condition of non-state-owned nature,the major shareholders’ increasing stock behavior has a significantly positivecorrelation with the company value; Major shareholders’ decreasing stockbehavior has a significantly positive correlation with the company value and hisshareholding ratio inhibits this positive influence. Based on the analysis of theactual conclusion, the paper presents some policy recommendations, and pointsout the insufficiency and the direction of the future.