Shareholding Of Parent Company, Managerial Power And Growth Of Subsidiaries

Throughout the history of the global economic development and contribute to the national economy brought about a level of progress to enhance the international competitiveness, GDP growth is inseparable from the development of the Group companies. Chinese enterprise group is accompanied by an adaptation of the market economy and socialized production economic organization, it has become a pillar and a major force in national reform and opening up competition in the national economy generated. Establish a scientific and rational parent-subsidiary relationship is to promote the rapid growth of various subsidiaries, to ensure that the prerequisite and basis for the overall sustainable development of enterprise groups. In this context, the paper is devoted to study the relationship between parent company and subsidiaries growing resistance of mechanism.This paper reviews literature on the relationship between parent and subsidiary companies, business growth and the management of power, formed a preliminary research ideas. Then this study, describes the ratio of the parent holding subsidiaries grow two dimensions-the impact profitability and growth potential, and analyzes the effects of the subsidiary’s management authority to the agency relationship between the two, and further, we introduce a subsidiary of the concept of cash flow and explore its role in regulating the relationship between the ratio of the parent company and subsidiaries shareholding growth, through the refinement and expansion of the above-described relationship, formed a research model and hypothesis of this paper. Eventually, the paper selects 414 listed companies in the group attributes as samples, the use of 1656 data set of valid observation for four consecutive years by the formation of the hypothesis put forward by one study empirically tested.Through empirical research, this paper draws the following conclusions:(1) controlling the ratio of the parent company and a significant negative correlation with management authority; (2) the parent company and the subsidiary holding ratio profitability was significantly positively correlated with growth potential significant negative subsidiaries related; (3) a subsidiary of a subsidiary’s management authority to profitability was significantly negatively correlated significantly positively correlated with the growth potential of its subsidiaries; (4) the management authority of the parent company, a subsidiary of shareholding in subsidiaries profitability and growth potential the relationship between the part played an intermediary role; (5) a subsidiary of the cash flow management of the relationship between power and profitability of the existence of a negative regulatory role of power between management and subsidiaries subsidiaries did not regulate growth potential effect. Finally, from the build scientific and standardized parent-subsidiary relationship gives policy recommendations in order to optimize the Group organization and management system, promote healthy and rapid development.