The Supervision And Govermance Effect Of Multiple Large Shareholders

Equity construction has consistently been a hot issue in corporate governance.It determines the distribution of corporate equity and is the rational launch point of corporate governance.In recent years,with the deepening of the reform of mixed ownership and the expansion of opening to the external world,the shareholding structure with multiple large shareholders is more and more common in the capital market,and the shareholders structure with multiple large shareholders typically exists in domestic and international capital markets.The complexity of the composition of shareholders has also led to the scholarly debate on the governance effect of multiple large shareholders.As to the influence of the shareholding structure with multiple large shareholders on corporate governance,the scholarly circles have put forward two distinct viewpoints: supervision governance and collusion fraud.This thesis attempts to provide empirical evidence for the supervision and governance of multiple large shareholders from the perspective of corporate fraud.The 20 th National Congress of the Communist Party of China has made it apparent that high-quality development is the paramount task of constructing a contemporary socialist country in an all-round way,and corporate fraud is the outward manifestation of corporate governance defects and a major obstacle to the sustained high-quality development of the capital market in the future.Therefore,strengthening the supervision and management of corporate irregularities has a clear significance of the times.The equity structure is the internal component to restrain the enterprise from violating the rules,but at present,there is little literature to systematically discuss the influence of multiple large shareholders on corporate fraud.Therefore,the study on the effect mechanism and economic effects of multiple large shareholders’ ownership structure on corporate fraud has substantial practical significance and extensive scholarly space.Starting from the effect of supervision and governance by multiple large shareholders,this thesis takes the Shanghai and Shenzhen A-share listed companies from 2007 to 2020 as a sample to systematically research the impact mechanism and economic effects of corporate fraud generated by the ownership structure with multiple large shareholders.The research found that registered companies with multiple large shareholder ownership structures can significantly reduce corporate fraud.The impact mechanism of multiple large shareholders on corporate non-compliance mainly includes "information supervision" and "cooperative governance".On the one hand,multiple large shareholders can enhance corporate information transparency to alleviate internal and external information asymmetry.On the other hand,multiple large shareholders participate in corporate management decisions by virtue of their own shareholding proportion to enhance corporate governance.Specifically,the appointment of directors and the threat of withdrawal are significant means for non-controlling majority shareholders to take a supervisory and governance role.After contemplating a series of methods to alleviate endogenous problems,such as reverse causality,Heckman test,propensity score matching,dual difference model of changes in equity structure,entropy balance matching,placebo test,fixed effect,industry annual trend and instrument variables,the conclusion of this thesis is still valid.In addition,we also use the methods of replacing the explained variables,replacing the explained variables,removing the samples of absolute regulating position,removing the samples of less than three years of listing and replacing the regression model to test the robustness,which further improves the reliability of the research conclusions in this thesis.Furthermore,this thesis analyzes the degree of supervision and governance of multiple large shareholders,the stability of shareholding and the influence of the types of non-controlling large shareholders on corporate fraud.The study found that the higher the degree of supervision of multiple large shareholders,the more non-controlling large shareholders and the higher the shareholding proportion relative to the first large shareholder,the better the supervision and governance effect of corporate fraud,and the stability of equity structure will also enhance the supervision and governance effect of multiple large shareholders.After considering the heterogeneity of the types of non-controlling majority shareholders,it is found that when the other majority shareholders are "state-owned","institutional" and "international capital",the effect of corporate governance is better,while the "private" and "individual" majority shareholders have stronger self-interest motivation,which results in poorer governance.After considering the heterogeneity of corporate violation types,it is found that multiple large shareholders primarily inhibit corporate information disclosure violations and business violations,and the inhibition effect on leadership violations is not obvious.The potential reason is that the shareholding ratio of multiple major shareholders is more dispersed under the ownership structure,which is simple to induce stock price fluctuations,and creates potential opportunities for leadership to manipulate stock prices and insider trading.After using the partly observable binary Probit model to differentiate the illegal tendency and illegal inspection,it is found that many large shareholders principally inhibit the illegal tendency of the enterprise and do not directly interfere with the illegal inspection of the enterprise.In addition,this thesis also studies the economic outcomes of multiple large shareholders affecting corporate non-compliance,principally including enhancing corporate value,improving long-term performance and mitigating operational risks.The study of economic consequences also confirms the positive role of multiple large shareholders’ equity structure.