Effect Of Actual Controller, Institutional Investor And Equity Restriction On Corporate Performance

Listed companies in China have the phenomenon of equity concentration, which generally results in the actual controller in China's listed companies. The actual controller has the motivation to participate in the supervision and management of the company actively to improve the company performance. At the same time, it also has the behavior of violating the interests of minority shareholders and the company through related party transactions, resulting in the decline in corporate performance. With the fund companies,insurance companies, pension funds, foreign investors, private equity funds and other types of institutional investors entering the capital market in our country,the scale of China's institutional investors continues to grow. In theory, they take advantages of professional ability and information resources to supervise company's actual controller effectively. And they can prevent the actual controller encroaching on the interests of the company so as to enhance the corporate performance. However, they may lack the enthusiasm to participate in corporate governance.When the ownership and control of the company are separated, principal-agent problems emerged at the historic moment. The interests of the owners are damaged by the management, and the interests of the minority shareholders are violated by the large shareholders. The deviation from the maximization of the company's value is not conducive to the improvement of the company's performance. This paper analyzes corporate performance from the perspective of internal and external governance theory,that is, from internal corporate governance - actual controller and external corporate governance - institutional investors to analyze their impact on corporate performance.Firstly, analyze the effect of actual controller's shareholding ratio on corporate performance. And then analyze the impact of the type of institutional investors and shareholding ratio on corporate performance. Finally, this paper analyzes the impact of institutional investors on the corporate performance by analyzing the equity balance degree of the actual controller. And find ways to alleviate the principal-agent problems so as to provide reference and suggestions for the improvement of corporate governance mechanism and improve the efficiency of China's capital market.This paper mainly uses the method of qualitative analysis and quantitative analysis,and selects the data of Chinese A-share listed companies from 2010 to 2015 for six years.According to the specific characteristics of China's listed companies and empirical analysis,it is found that there is a positive U-shaped relationship between the actual controller's shareholding ratio and corporate performance in Chinese A-share listed companies, which has different effects on corporate performance. Institutional investors have the ability to select high-quality companies. The higher the proportion of institutional investors, the more conducive to improving the performance of the company. The shareholding proportion of securities investment funds and QFII is positively related to corporate performance,while securities companies and insurance companies generally have business dealings with the target company and remain "neutral" in corporate governance, and the shareholding ratio is not related to corporate performance. Institutional investors' equity balance degree on the actual controller is conducive to the improvement of corporate performance, and the supervision and management of institutional investors can effectively restrain the behavior that the actual controller harms the interests of the company. These conclusions provide new ideas for perfecting capital market and corporate governance mechanism.