The Study On The Influence Of The Major Shareholder’s Increasing And Decreasing Upon The Company Value

Big shareholders change the shareholding means big shareholders increase or reduce their holdings, but what kind of impact will be caused to the value ofthecompany by this behavior? This is the question which we researched today. Some scholars believe that: according to signaling theory, big shareholders increase their holdings will send a good signal to the market, the stock price will rise and the value of the company will increase, if big shareholders reduce their holdings will send a bad signal to the market,public expectations of the company will be influenced,the stock price will go down and the value of the company will drop. Other scholars believe that,controlling shareholder increase shareholdings on the one hand will achieve some good results such as supervision and constraint management,and this will bring positive benefits to the company, on the other hand will bring the possibility of major shareholders misappropriation of company property,and this is whatever not conducive to the company’s benefit. Controlling shareholder reduce shareholdings,on the one hand maybe the binding on management will be reduced, this kind of move on the other hand will enhance the equity between the checks and balances, that will conducive to the development of the company. The above all makes sense from the perspective of theoretical analysis, but if it really can find support from the data? There are a lot of domestic and foreign scholars have done a large amount of dataresearch to prove his reasoning. Foreign scholars’ research results tend to use ownership concentrationto explain, namely when the big shareholders increase their holdings, the value of the company will decline. When big shareholders reduce their holdings, corporate value will rise. Domestic scholars’ conclusion is different, and the angle of the selected was limited. Some scholars have concluded that the ownership concentration has "U" shapedrelationship with the enterprise value. Some scholars have concluded, there is positivecorrelation between corporate value and legal person share, state-owned shares hasnothing to do with the enterprise value. Some scholars concluded that the relationship between ownership concentration and corporate values were positively correlated in the real estate industry and manufacturing. Why so many conclusions do would have been different? There should be three reasons. Firstly, China’s full circulation of equity of listed companies occurred after the reform of tradable share in 2005.This is a gradual process, in the process, the calculation of enterprise value is not yet mature. Secondly Scholar study the problem from different industries and different nature of equity, the results are not comparable. There is a lot of speculation in the stock market of our country. The academic circles have reached a conclusion which is accepted: the stock market in our country so far is weak form efficient, itmeans, Chinese stock prices can’t accurately reflect the actual value of the company.Based on the literature review and theoretical analysis, we got general assumptions about the relationship between big shareholders increase or decrease its stock’s and the enterprise value.And then through the empirical data analysis, judge thishypothesis is correct or not. This is the purpose of this article.There are two lines throughout this article, one is the theoretical analysis. The theoretical analysis carried out from two perspectives, namely the ownership structure affect the enterprise value and signal transmission influence enterprise value. Big shareholders increase or reduce its stock is bound to affect the principal-agent relationship between shareholders and managers, big shareholders increase or reduce its stock will constraints and motivate managers effectively or violate the interests of minority shareholders above managers? Big shareholderscan deliver the good information to market if they increase their stock, and if it is beneficial to enhance the confidence of investors? This article will use the corporate governance theory, principal-agent theory, signaling theory as theoretical basis to explain how the big shareholders increase or decrease its stock influence the enterprise value of the company. The other is the empirical analysis, in the empirical analysis, we will group and hierarchical 1320 samples which meet the conditions from 2012 to 2013. All shareholders can be divided into two groups, the first big shareholders and non-controlling large shareholders group. The regression results are as follows: The relationship between the first big shareholders increased holdings and the enterprise value is divided into three stages,the first stage is when the first big shareholder’s stock is low, the first big shareholders increase holdings is positively related with the enterprise value,the second stage is when the first big shareholder’s stock is medium, the first big shareholders increase holdings was negatively correlated with the enterprise value,the third stage is when the proportion of the first big shareholders is in a state of absolute holdings or relative holdings, the first big shareholders increase holdings is positively related with the enterprise value. The first big shareholders reduced holdings has "U" shaped relationship with the enterprise value, namely when the ratio of the first big shareholders reduced holdings is small, the first major shareholders reduced holdings is positively related with the enterprise value. When the proportion of the first major shareholders reduced holdings is large, thefirst major shareholders reduced holdings has negative relationship with enterprise value. Non-controlling large shareholders here refers to the shareholder whose stockranked second to tenth. There is no significant correlation between increased holdings and reducing the holdings of noncontrolling shareholders and the enterprise value. Some of these results confirmed our hypothesis, but some results are can’t suppot ourassumptions. In this paper, we will analyse the results. We can find that large shareholders’ behavior can affect the enterprise value, but the effect is caused by many factors some of the factors are strong, the others are weak. Finally combining our empirical conclusion, we put forward the feasible policies and suggestions, and also points out the insufficiencies of this article and the direction of the future.