Ownership Structure，Multiple Large Shareholders And Corporate Risk-taking

The background of China’s transition economy and special ownership structure of listedcompanies provides a good opportunity for the study of multiple large shareholders of mutualchecks and balances mechanism. In recent years, China’s scholars study shows, not only dueto the dominance and dispersed ownership structure in the capital markets, but alsowidespread multiple large shareholders equity structure. There are different points of view indomestic about multiple large shareholders coexistence impact on the value of the company.However, now study about balance of shareholders’ structure and risk-taking don’t have indomestic. Since the phenomenon of coexistence of multiple large shareholders in listedcompanies at home and abroad has been very common, so what factors affect the form ofshareholding structure? For what is the effect of multiple large shareholders coexistence bearon the risk of the company, the effect how? Based on the above reason, this article from theperspective of multiple large shareholders makes an empirical analysis on risk-taking,promote the research on enterprise risk.This paper is investigated whether multiple large shareholders (MLS) affect corporaterisk-taking. This paper show that the presence, number and shareholding ratio of MLS, otherthan the largest controlling shareholder (LCS), are associated with less predictable operatingperformance (ROA). This indicates that MLS are able to prevent the LCS to dictate itspreference for low-risk projects in order to protect its future consumption of private benefits.As a result, firms undertake better investments regardless of their intrinsic risks, and thiseventually leads them to achieve higher performance. MLS are thus confirmed to play acritical role in corporate governance.We put forward the hypothesis based on the further domestic and foreign research of theprevious. We adopt2008-2010data of China’s two cities of Shenzhen and ShanghaiMotherboard A-share listing Corporation as the study sample, to analyze the relationshipbetween multiple large shareholders of listing Corporation balance structure and firm riskfrom empirical perspective. The empirical study found that: the single largest shareholderexists in enterprise, enterprise risk is low, however, the enterprise in addition single largeshareholders, there are many other big shareholders, high risk undertaken by the enterprise.This shows that when multiple large shareholders mechanism does not exist, operatingperformance more predictable, and the corporate will choose low risk projects. In contrast, the presence of multiple large shareholders balance mechanism, there’s no telling businessperformance, with high risk investment. Thus confirming the multiple large shareholdersstructure and unpredictable business performance are related, indicating that multiple largeshareholders is able to prevent the first major shareholders in order to protect the privateinterests of its future, to choose the low risk project. Therefore, regardless of the inherent risks,enterprises can better investment, and ultimately lead to enterprises to get higher returns, todemonstrate the effects of multiple large shareholders on the risk-taking, thus confirmingmultiple large shareholders play an important role in corporate governance.