An Empirical Study On The Concentration Of Stock Ownership And Executive Motivation In Private Enterprises

The development of private enterprises is an important driving force of economy. More and more private enterprises are listed in the capital market. Then, how to improve competitiveness and make steady and healthy development is a key point. Good corporate governance can improve the business performance and increase the competitiveness of enterprises. So the researches on corporate governance and corporate performance have been very popular.In this paper, the research objects are private enterprises maintaining the listing status in the year2009to2011in Shanghai or Shenzhen. Governing the company’s governance way, the enterprises are divided into two kinds-family firms and non-family firms. Then the relationships between the relevant elements of the corporate governance of the listed private enterprises and corporate performance are analyzed. These elements include ownership concentration and executive incentive structure in corporate governance involving the senior executive compensation and the senior executive ownership proportion.Although empirical researches on corporate governance and corporate performance are widespread, they are almost based on the general regression. Quantile Regression method has few constraints and deals with heterogeneity better. In this article, the Quantile Regression method is used to get relatively detailed conclusion.Combining Quantile Regression with panel data, the relationship between the index system of governance factors and corporate performance can be got. Then non-listed-family-enterprises and listed-family-enterprises are compared with each other. Empirical results:The results got from the Quantile Regression Model are more in line with the actual situation. The result precisely exemplifies the advantages of Quantile Regression Model over fixed effects model.For listed non-family firms and family firms with very poor performance, ownership concentration is not relevant to performance; for the non-family ones with intermediate level performance, they are related; when performance is very good, inverted U-shape can exist, and there is an optimal ownership concentration. For the family firms with better performance, corporate performance shows U-shaped changes along with the ownership concentration varies. For both non-family firms and family firms, the sum of senior executives’ compensation and corporate performance are positively related. For the non-family firms with poor performance and the ones with very good performance, the correlation coefficient is larger. When the quantile is between the interval from0.1to0.4, family firms and non-family firms has no significant differences on the relationship between the sum of senior executives’ compensation and corporate performance; while on other quantiles (with better performance), the family firms has greater impact than the non-family firms.For the non-family firms and family firms with performance below the medium level, the senior executives’ownership proportion is positively relative to corporate performance, and the coefficient gets larger when the performance are very good. For the family firms, the coefficient gets larger when the performance are very bad; the coefficient turns from positive to negative, that is to say, for the family firms with very good performance, the senior executives’ownership proportion can make negative impact on the company’s performance.