An Empirical Study On Ownership Structure,Board Characteristics And Market Value Management

Because of the non-tradable shares reform of China in2005, the enterprise management philosophy has changed from profit-maximizing into enterprise&shareholder-value-maximizing. The listed corporation has began to turn their gaze towards market value, and then the market value management has stepped onto the stage of history. However, in2013, Kweichow Moutai, as the myth of the stock market, which share price was almost cut in half in less than one year, and the share price of Letv soared three times within half year. The stock price was changed so drastically, which inevitably had its good or bad factors, but it was also inseparable from the effectiveness of the market value management. Under the dual impact of theoretical and practical backgrounds, this paper takes ownership structure and board characteristics, as a breakthrough point, to explore how they affect the market value managementOwnership structure and board characteristics largely determine the level of corporate governance, while corporate governance is an important premium factor to the effectiveness of the market value management, moreover, the value creation process of the market value management cannot do without the corporate governance. Therefore, this paper takes the value creation as a bridge to connect the ownership structure and board characteristics with the market value management, and then to research the relationship between three of them.The author selects China’s listed companies in the A-share market from2009to2013. First of all, the paper calculates the total score of the effectiveness of the market value management using the principal component analysis and the percentage method with the evaluation index system of the market value management which was released by the research center of market value management. After that, the author takes the effectiveness of the market value management as the dependent variable and regards the ownership structure and board characteristics as the two independent variables, and then put the variables into the empirical model to make a empirical test. At last, the empirical results show:First, ownership concentration is significantly related to the effectiveness of the market value management; Second, There is a positive correlation between equity balance and the effectiveness of the market value management; Third, the board size and the effectiveness of the market value management doesn’t pass the significance test, there is a weak positive correlation; Fourth, board independence and the effect of the market value management present a negative correlation under10%significance level; Fifth, The percentage of shares hold by the board has a inverted "U" relationship with the effect of the market value management.According to the empirical results, the author gives some advice at the end of the paper:Establishing a diversified ownership structure; Increasing the proportion of board shareholding; Improving the system of independent directors.