An Study On The Effect Of Corporate Governance On Tunneling Of Large Shareholders

This paper selected private listed companies in Jiangsu and Zhejiang province as samples,did an empirical analysis on the impact of corporate governance on the controlling shareholders’ tunneling, and provided some suggestions to reduce the shareholders’ tunneling behavior from the perspective of improving the corporate governance.Firstly, the paper reviewed and combed the related literature at home and abroad from three aspects: tunneling behavior ‘s existence and universality, methods and consequences of tunneling and the effect of corporate governance on the tunneling of shareholders. On the basis of this,the author put forward the research ideas and research methods of this paper. Secondly, the paper introduced the theoretical basis of this study, and explains the concept of corporate governance and tunneling, which laid the theoretical foundation for the full text research.Then the paper analyzed the status of private listed companies in Jiangsu and Zhejiang province. Results showed that the controlling shareholders tunnel private listed companies mainly through related-party transactions、 cash dividend and occupation of funds. Corporate governance structure of the private listed companies has the following characteristics: "alone big" features, low degree of ownership balancing and the controlling shareholders served as directors and executives.there were 79.69% of the listing corporation’s actual controller were served as chairman or general manager. the existence of these situation makes the private listing corporations’ shareholders in Jiangsu and Zhejiang province have a strong ability to tunnel, they were very likely to adopt various methods to tunnel the company, the interests of small shareholders can not be guaranteed. Then, combining with the analysis of private listing Corporations’ status, the paper conducted empirical research on the impact of corporate governance factors on the tunneling of shareholders. the paper choose private listed companies in Jiangsu and Zhejiang province from year 2009 to year 2013 as research sample, selected occupation of funds index as an alternative variable of shareholders‘tunneling behavior. selected seven internal corporate governance variables as explanatory variables,then examined the correlation between the internal governance structure and shareholders’ tunneling behavior. Firstly, the paper used the method of descriptive statistics,analyzed the data of each variable, this allows us to have a preliminary understanding of the variables. Then by using the Pearson correlation analysis, the paper detected the correlation among various explanatory variables, found that there are some multicollinearity among the corporate governance variables, So the paper did regression analysis one by one. Empirical results show that: with the rising of equity concentration, shareholders’ tunneling behavior firstly rising,then falling, it’s an inverted U type;Whether the actual controller served as chairman or general manager has significant negative correlation relationship with shareholders’ tunneling;The big size of the board of supervisors have certain inhibition effect on the shareholders’ tunneling behaviors;Strengthen the salary incentive degree of senior management can significantly reduce the shareholders’ tunneling behavior; There is no significant correlation between the equity balance degree and shareholders’ tunneling behavior, between the scale of the board of directors and shareholders’ tunneling behavior;The proportion of independent directors is positively correlated with the shareholders’ tunneling behavior. Finally, combined with the analysis of current situation of private listed company in Jiangsu and Zhejiang province and the empirical research results, the paper put forward some policy suggestions to improve the corporate governance structure and reduce the shareholders’ tunneling behavior.