Research On The Relationship Between Equity Structure,Related Party Transactions And Company Performance

As it is known for us, the majority of corporations in our country are restructured from state-owned companies by the way of divesting high quality assets to list, so their independence is poor and have obvious political color. Although these listed companies have experienced the reform of non-tradable shares in 2007, issues such as equity structure imbalance and high equity concentration still remain. Incomplete equity structure can cause a lot of unfair related party transactions easily, which can be verified by the frequent exposure of related party transactions fraud cases in recent years. Unfair related party transactions will not only harm the interests and development of the company, but also convey the wrong information to minority shareholders,disrupt the normal operation order of the securities market, and thus hinder the healthy and steady development of our country economy, so it is necessary to make clear the deep influence of equity structure on the related party transactions and then analyzes that whether the current existence of related party transactions will detract from the company performance or not, so as to verify the current equity structure of listed companies do impact related party transactions and the main use of it is the interests of mining.This paper hopes that the research conclusion can provide some useful ideas to improve equity structure of the listed company, make related party transactions specification and enhance company performance.Throughout the full text, the theoretical analysis and empirical study combine with each other. This article first to introduce the concepts of equity structure, related party transactions,and company performance and some related economic theories; Then analyze the influence of equity structure on the related party transaction scale as well as the relationship between related party transaction scale and company performance and put forward some research hypotheses,combining the research achievements of predecessors and the actual situation of the securities market; Nest define research variables, build empirical models and select A-share manufacturing listed companies with related party transactins occurred from 2012 to 2014 as samples to carry out some empirical analyses such as descriptive statistics analysis, correlation analysis and multiple linear analysis so as to test research hypotheses on the basis of rough analysis of the present situation of equity structure of Chinese listed companies and related party transactions,drawing empirical conclusions; Finally propose many pieces of advice on how to furtherimprove the equity structure of listed companies to regulate related paty transactions of listed companies, combining with the above research results.This paper’s empirically results show: in listed companies, equity ownership structure,types of equity structure and ownership structure all have a significant impact on the related party transactions scale. Thereinto, the proportion of the controlling shareholder sharehoiding,floating stocks, and state-owned shares and executive pay are all positively related to the related party transaction scale; both equity restriction of the second to the fifth largest shareholder and the controlling shareholder and the proportion of executives shareholding are negatively related to the related party transaction scale; After issuing B shares or H shares, company will strengthen information disclosure and improve audit quality, so as to help curb the occurrence of related party transactions, reducing its scale. In addition, Company performance has negative effect on the related party transaction scale significantly, which means that most of the related party transactions of listed companies in China are the type of tunneling. In conclusion, the results indicate that in Chinese listed companies, both the controlling shareholder and state-owned shareholders do control related party transactions for the benefit output, and minority shareholders let the happening of this behavior for speculative psychological factors. However,as long as set up reasonable equity structure, implement effective incentive plan, and strengthen information disclosure, the decrease or even disappearence of the unfair related party transactions will be just around the corner.