The Propping Of Large Shareholders Based On Local Government Protection

The report of the 18 th National Congress of the Communist Party of China pointed out clear requirements for the development direction of the public economy,the focus of state-owned capital,and the reform of state-owned enterprises.As the industrial structure is in the period of transformation and upgrading,some large state-owned industrial enterprise groups have emerged with large or small crisis situation.The nature of state-owned enterprises’ property rights determines the close relationship between corporate behaviors and government interests.The future development of the enterprise affects the local employment and taxation,thus affecting the political achievements on which government officials are promoted.Therefore,when the state-owned enterprises are facing crisis,the local government will will use resources such as tax incentives and government reputation to provide preferential treatment for enterprise development and clear obstacles.However,these methods are limited and not flexible enough.Due to the strict supervision of listed companies and the existence of principal-agent relationship,the local government can take flexible measures to send interest to the group company,and then this delivery is indirectly used to support the enterprise through the major shareholders.This paper is to research the Support behavior of major shareholders in the context of local government protection.By comparing the major shareholders compare the ways and results of the Propping they take on the two listed companies with the same major shareholder and different regions at the same time,and summarize that the characteristics of Supporting behavior that the major shareholders adopted under the protection of different local governments,and then analyze the relationship between the Supporting behavior of major shareholders and the protection of local governments according to the economic structure,economic status and strategic position of the two local governments.This article consists of six chapters,the main contents are as follows.The first chapter introduces the background and research significance of the research questions,the main content of the research.The second chapter reviews the literature of Supporting behavior of major shareholders and the local government protection,and then sorts out the timing,influencing factors,motives and methods of major shareholders’ support behavior,the motives of local government protection and the relevant content of the path.The third chapter sorts out the theory of major shareholder behavior and the theory of local government behavior,and puts forward the research theme of this paper,which is the characteristics,effects of the Supporting behavior of large shareholders under the protection factor of local government,and the relationship between the two.The fourth chapter introduces the historical evolution,shareholder changes and major business operations of the company,and the financial dilemma faced by the company.The fifth chapter gives a detailed description and prediction of the Supporting behavior of the major shareholders,and analyzes the effect of the support activities of the major shareholders.The sixth chapter discusses the relationship between the Supporting behavior obtained by the company and the protection of local government.In the seventh chapter,according to the problems presented by the above-mentioned research,the solutions are proposed to improve the effectiveness of the measures to promote enterprise development.The article innovation is reflected in the following two aspects.Firstly,the research topic of this paper is novel.More research literature is to study the Supporting behavior of the group’s major shareholders,or to study the direct protection measures of local governments.This paper combines the local government protection with the Supporting behavior of the major shareholders,and examines the characteristics and effects of the Supporting behavior of the major shareholders in the context of local government protection through the listed companies facing financial difficulties.Secondly,this paper selected two case companies for comparative analysis.The two listed companies belong to the same group,but different jurisdictions,so they can use the similarities and differences between the two companies in the Supporting behavior characteristics,effects and final outcomes of the major shareholders to clearly explain the relationship with the local government protection and the Supporting behavior of major shareholders.