Impact Of Hierarchical Pyramid On Capital Occupation And Corporate Performance

Enterprise Group is an important form of business organization, exists in the world, on their own as well as the socio-economic development has played a significant role. Pyramid structure is the organizational structure of the enterprise group widely used. Pyramid structure is the formation of the internal structure of layers of control by controlling the chain, you can achieve intra-group funding share for the Group to provide internal capital markets, and promote the integration of internal resource allocation. However, due to the protection of investor rights law is not perfect, information disclosure is not standardized, Group imperfect internal governance mechanisms and other reasons, the Group’s top-level control who will take advantage of multi-level pyramid structure of concealment, embezzlement of funds for the underlying company. The listing of the company’s strong financial capabilities make it the preferred target of shareholder tunneling. Such encroachment will not only affect the listed company’s own development, but also to the good functioning of the capital market. Therefore, this paper studies the impact of the financial pyramid hierarchy occupation and firm performance, exposing the darkness behind the pyramid structure, hoping to alert the controlling shareholder of violations, remind small investors focus on such acts, and cause more stringent regulatory authorities control, in order to promote the healthy functioning of our business groups and the capital markets.In this paper, a combination of theoretical and empirical research methods, the study included all categories of the pyramid structure, in the overall study were "separable" and "non-separable" two types of further study. When building the model, select the level of the pyramid structure as the main explanatory variables were selected explanatory variables also try to be diversified. For example, the funds used to be divided into "business" and "non-operating" company performance indicators into "financial indicators" and "market indicators." Through data collection, and ultimately selected sample of 1633 qualified company to collect its 2011-2013 three-year data, in turn descriptive statistics, correlation test and regression analysis, the following conclusions. Our enterprise groups to use more two-and three-tier pyramid structure of listed companies and more in the bottom of the pyramid structure; The more the number of pyramid levels, funds of listed companies occupied more the worse the performance of listed companies, private holding down, these two effects is more significant; Different types of pyramid structures were further found that under separate structure, the impact on the funds used pyramid levels and the company’s performance is more significant, the pyramid hierarchical structure under private control of the separation of funds used and the performance of the company is most obvious.