Research On The Ownership Structure And Check&Balance Of Shareholding's Effect On The Corporate Performance Of Chinese Listed IT Companies

It is difficult to clarify whether it is a centralized equity structure or a balanced or decentralized equity structure that is more conducive to the company's business,and is more able to increase shareholder returns,which in the area of corporate governance is found difficult to form a consensus.In theory,the concentration of equity will help to strengthen the supervision of shareholders to the management and reduce the information asymmetry between shareholders and managers,but the concentration of shares will also cause large shareholders to exploit and grab the interests of minority shareholders,thus damaging the performance of the company.Therefore,it is difficult to completely distinguish the dominating effect theoretically.From the empirical study,the choice of different samples at home and abroad also found the same unsettled conclusion.In many empirical studies,the industry is an important control variable.David(1997)and Jiang Dong and Chen Xiao(2000)directly point out that the relationship between the two is related to the choice of the industry.Therefore,this paper chooses Chinese IT industry to carry out research to ensure that the industry and the macro environment of the panel remain the same.Since the birth of the computer and the Internet,the information technology industry has become the cornerstone of economic activities and social life.Over the past few decades,the world economy has witnessed the outstanding contribution of the information technology industry to economic development,social life,resource conservation and environmental protection.Now as we march into the new era,with the big data,Internet of Things,mobile Internet,cloud computing and other new technologies,the information technology will once again become the engine of world economic development.Specifically,in China,information technology industry has been supported and encouraged by the government and developed rapidly.In the face of new technological trends,the government has realized that a new generation of information technology,represented by big data,IOT and cloud computing is now coming and the changes they will bring to all industries.There is still a gap between China and other developed countries in the development of these new technologies.But the transformation of the old industry promoted by new generation IT technologies will certain be China's future long-term important task.Meanwhile,the ownership structure of China's information technology industry has the characteristics of full circulation,non-state holding,state-owned shares and lower proportion of legal person shares,and it is also convenient to control the equity attribute variables,focusing on equity concentration and equity balance index.In this context,this paper will focus on corporate governance issues-equity structure on the information technology industry.In conclusion it is of theoretical and practical importance to do the research on Chinese IT industry.The paper analyzes the relationship between the ownership concentration,the equity balance with its business performance or capital return rate in the information technology industry through the literature research and the empirical analysis.In fact,the mechanism of equity on corporate performance is complex and can be made through the improvement of internal management level,the guarantee of financing advantages,the effect on external social expectations and so on.Ownership structure includes ownership concentration,equity check&balance and equity attributes.And the company's performance also has different measurement methods such as operating margin,return on capital and Tobin's Q value.Since the sample enterprises of the information technology industry selected in this paper are non-state holdings,full share-circulation,low state-owned shareholding and legal person shareholding,so the research can focus on equity concentration and equity checks and balances.In terms of corporate performance indicators,Tobin's Q value requires an efficient financial market,so this paper chooses the company's capital return rate and operating profit margin as an indicator of firm performance.Operating profit reflects the company's operating efficiency,and the return on capital reflects the effiency in management,finance and operation.The two indicator are related while also different,thus is good for comparative study.The paper is divided into six chapters,the first chapter is the introduction,which introduces the research background and significance.It explains the research methods and the paper structure.The second chapter introduces the characteristics and current situation of the information technology industry of China.The third chapter is the literature review at home and abroad.The fourth chapter is the theoretical framework,which introduces the theory and basic concept of ownership structure and corporate governance.It puts forward 3 assumptions:?the linear relationship between stock ownership concentration and corporate performance;?In-significant relation between the equity checks and balances and corporate performance.In the fifth chapter.the correlation test and regression analysisis conducted base on the three assumptions previously mentioned,with the data of the listed companies in the information technology industry of China from 2006 to 2015,and the results were as follows:?There is a significant positive correlation between Herfindahl index 1 and Herfindahl index 5 with corporate performance.?The model using stock concentration as independent variable,the scale of the firm,the company's asset-liability ratio and the asset growth rate as the control variables failed to explain the ROE in IT company.The relationship between stock concentration,stock check and balance index with ROE is insignificant;? Equity checks and balances and the company's business performance is not significantly related.The innovation of this paper lies in the fact that 1)it picks Chinese IT industry specifically so as to control the external variables of the equity attribute and the industry.2)Combine the principal-agent theory and characteristics of Chinese IT industry to make reasonable assumptions;3)Using panel data of IT industry from 2010-2015 panel data,which is new and boasts wide data coverage;4)the model shows stock concentration is related to the company's operating performance,while failed to explain its capital return.Combined with the DuPont analysis model,the paper proposed further study in the relationship of ownership concentration and corporate asset management efficiency and financial leverage in the information technology industry,which is an interesting topic and was seldom mentioned before.