A Research Of The Effects Of The Executive Shareholding Proportion On Corporate Performance After The Spin-Off

M&A and spin-off are the two major capital operation strategies of companies,they are also the main patterns for enterprises to expand or reduce their scales.In China,these two strategies are more and more used by listed companies,involved in broader and broader trading range.There are a lot of researches have done about this two strategies in our country,and these researches indeed have made some progress. In China,the development of M&A is earlier than spin-off,getting more time to grow up,the theoretical and empirical researches on M&A is also more abundant. Now,enterprises' spin-off is hot,it's urgent to establish a more complete theoretical foundation to guide our practices.The paper demonstrates that the company will acquire a significant positive cumulative abnormal return and buy and hold abnormal return, indicating that short and long term performance of the business after the spin-off has improved after the spin-off,adopting event study method.However,by studying the short-term performance after the spin-off in companies with different levels of management shareholding, we found that such positive effects are more significant in companies with low-level executive shareholding than companies with high-level executive shareholding.This is mainly because the market make reactions in advance to the spin-off event in companies with high-level executive shareholding.Therefore, the positive effects after the spin-off announcement is not that significant as companies with low-level executive shareholding.but before the announcement, companies with high-level executive shareholding received a significantly positive cumulative abnormal returns. In addition, the paper analyzes the long-term performance after the spin-off of companies under different levels of executive shareholding, the study found that companies with high-levels executive shareholding have access to significantly more positive long-term performance,indicating that the level of executive shareholding do have impacts on companies' performance after the spin-off.This suggests that,in the short term, supervisory of boards can be used as an alternative to incentives.But in the long run, regulation can not replace incentives.While the Board may have a strong impact on the company's major decisions(for example, spin-off), but thelong-term development of enterprises relies more on the managers who actually operate the company.They know better about the company, they can obtain more timely and reliable information,and they are more professional in management, thus giving executives better incentives can make sure their interests comsist with corporates' interests,bring companies' better development.The summary section in this article put forward the corresponding recommendations,including recommendations for listed companies and recommendations about constructing systems of rules and regulations. Our research explored the performance of companies after the spin-off from a new perspective,giving a new revelation for companies to make better business strategies, improve corporate governance,and enhance economic efficiency.