The Impact Of Equity Structure Of Listed Companies On Private Benefits Of Control

The role of the controlling shareholders in the corporate governance structure is ahot topic in the field of corporate governance. In the circumstance of the marketwhich is not highly developed, the controlling shareholders can use their controlpower to gain personal benefits by damaging the rights of medium-size and smallshareholders, which restricts the healthy development of capital markets. How toeffectively control the behavior of controlling shareholders against achieving privatebenefits to protect the legitimate interests of the medium-size and small shareholdersbecomes the focus of academic research.Starting from the transformation of focus on corporate governance theory, andbased on the unique features of ownership structure and control structure of listedcompanies in China, impact of ownership structure on Private Benefits of Control istheoretically analyzed. On the empirical analysis of China’s A-share market listedcompany transfer events from2006to2010, the level of Private Benefits of Control ismeasured, showing that China’s level is32.4%, similarly to Mexico, lower than Braziland other South American countries, and higher than the developed countries such asUnited States and British. It indicates that China’s capital market system is not perfect,and supervision level needs further improvement. Meanwhile, the empirical resultalso shows that property ownership, ownership concentration and ownershipbalancing power have a significant impact on Private Benefits of Control.Finally, specific measures and policy recommendations are proposed. Theyinclude optimizing corporate governance structure, improving equity transfermechanism, perfecting corporate ownership structure, establishing a diversifiedownership balancing mechanism, strengthening market supervision, standardizinginformation disclosure system of listed companies, and further strengthening legalsystems to protect minority investors.