The Length Of The Control Chain?the Behavior Of Ultimate Controller And Governance Effect Analysis

With the continuous development of China's market economy,because of two motivations of "tunneling" and "support",merger and acquisition companies often use pyramid ownership structure to reconstruct the control power.The ultimate controller controls the acquired company through the pyramid structure,thus forming the control chain and ultimately determining the shape of the pyramid structure.Ultimate controller control the company by the length of the control chain(hereinafter referred to as "the length of the control chain”)is one of the basic characteristics of the control chain,ultimate controller can take advantage of the long chain to evade government control,hidden identity,transfer property.The increase of the length of the control chain will make the ultimate controller create an encroachment motive,and also provide the ultimate controller with the opportunity to maximize the control of private income with the small benefit.Therefore,the behavior and of the ultimate controller are closely related to the length of the control chain.Will the increase in the length of the control chain lead to the ultimate controller's damage to the interests of the acquired enterprise? This thesis attempts to combine the length of the control chain and the behavior of ultimate controller,based on principal-agent theory,stakeholder theory,incentive compatibility theory and incentive compatibility theory,the author reviews the existing research on the consequences of chain length increases and the influencing factors of the behavior of ultimate controller,provides a theoretical basis for the case study.This thesis attempts to take a single case study method which is the acquisition of Little Swan,deeply analyzes why the ultimate controller did not damage the interests of the acquired enterprise t under the condition of the growth of the length of the control chain.Based on the perspective of the length of the control chain,the author propose that the reputation mechanism of ultimate controller,the supervision of the board of directors and the balance of ownership structure can constrain the behavior of ultimate controller.It provides some experience and reference for other enterprises on how to improve the positive behavior of ultimate controller,avoid private behavior of the ultimate controller caused by an increase in the length of the control chain.The analysis can be obtained by this article: First,not all the increase in the length of the control chain will serve the interests of the ultimate controller.From the perspective of control chain length,we find that the ultimate controller's reputation governance function and effective internal governance structure will play an intermediary role in balancing the ultimate controller's governance behavior.Secondly,the reputation mechanism of ultimate controller has a positive effect on its governance behavior,which can promote the improvement of corporate governance.Thirdly,a reasonable corporate governance structure can restrain the behavior of the ultimate controller,and then ease the tunneling behavior that may bring by the length of the control chain,and improve the corporate governance level.