Research On The Motivation And Effect Of Dual-class Share Structure Implemented By The Enterprises In STAR Market

At present,China’s economic development has entered a new normal,innovation has become an important driving force for economic development,and scientific and technological innovation enterprises play an important role in the economy.However,since the establishment of China’s stock market,the existence of dual-class share structure has not been allowed for a long time,and a large number of enterprises represented by JD and Alibaba have gone overseas to list,resulting in the outflow of growth dividends.In 2018,China officially established the science and technology innovation board,and in 2019,scientific and technological innovation enterprises were allowed to issue class shares with special voting rights,that is,they could be listed on the science and technology innovation board using dual-class share structure,which created a good development environment for innovative enterprises.In January 2020,as the first company listed on the Science and Technology Innovation Board with a dual-class share structure,UCloud officially ushered in the era of A-shares with different rights.At present,China’s research on the impact of dual-class share structure on corporate behavior is insufficient,and most of the research focuses on Chinese concept stock enterprises listed overseas,and even fewer research on enterprises listed on A-share dual-class share structure.Therefore,this thesis selects UCloud,the first enterprise listed on the domestic science and technology innovation board to implement dual-class share structure,as a research case to explore the motivation and effect of the implementation of its dual-class share structure,which has certain practical significance.This thesis adopts the literature research method to sort out and summarize the relevant literature,briefly introduces the current provisions and characteristics of dual-class share structure,and summarizes the relevant theories to provide a theoretical basis for the analysis part.Through the case study method,the motivation of the implementation of the dual-class share structure of UCloud is analyzed,and then the comparative analysis method is used to study the effect of the dual-class share structure of UCloud,and the influence path of dual-class share structure on UCloud is discussed by comparing Inhand and Arcsoft,which are listed on the Science and Technology Innovation Board but adopt the same share and equal rights structure.Finally,conclusions are drawn and relevant suggestions are given in combination with reality.Through the case analysis of the UCloud case,the motivation for implementing the dual-class share structure is obtained:(1)the company has experience in implementing the dual-class share structure.(2)The founder acquires control with a small amount of equity.(3)Ensure the long-term implementation of the development strategy.(4)The characteristics of scientific and technological innovation enterprises themselves.According to the analysis of the effect of the implementation of dual-class share structure in UCloud,in terms of corporate governance,the dual-class share structure guarantees the control of the founder team,so that the interests of the shareholders and management of UCloud are highly consistent,so it can reduce the first type of agency cost of the enterprise and improve the efficiency of corporate governance.In terms of corporate performance,under the dual-class share structure,the founder’s team adheres to the long-term development strategy,increases investment in R&D and adopts low-price competition strategies,etc.,which weakens the solvency and profitability of UCloud,but at the same time,under the operation and management of the founder,the operating ability of UCloud is relatively stable and the development ability has been improved.In terms of market reaction,the short-term market response of UCloud is good,and the long-term market response is relatively poor because of the company’s loss performance.From the analysis of other effects,under the dual-class share structure,the corporate resources of UCloud are reasonably allocated,but in order to attract external investors and improve the quality of audit reports,audit fees have increased significantly.Through the above research,it is found that the dual-class share structure can help improve the efficiency of corporate governance and ensure the long-term strategic development of UCloud,but there are also certain risks.In view of possible risks,this thesis puts forward the following suggestions:strengthen internal and external supervision mechanisms,establish a sound information disclosure system,set up sunset clauses and improve the litigation system.In view of the late start of the discussion of dual-class share structure in China,and most of the research is based on Chinese concept stock enterprises listed overseas as examples,this thesis can provide reference and reference for other enterprises considering listing on A-shares with dual-class share structure by studying the motivation and effect of the implementation of dual-class share structure in UCloud.