Research On The Motivation And Corporate Governance Effect Of Ninebot's Implementation Of Dual-class Share Structure Under VIE Mode

With the development of Internet technology and the advent of the era of big data,science and technology enterprises have grown rapidly,but generally faced with the contradiction between realizing financing needs and the founder’s control.The dual-class share structure is known as an effective measure to alleviate such contradictions.In June 2019,the Sci-Tech Innovation Board was opened,companies with dual-class share structures could list in China.In March 2018,China Securities Regulatory Commission(CSRC)clarified that VIE model enterprises can retain the VIE structure to achieve domestic listing by issuing shares or depositary receipts.It is foreseeable that China’s capital market will usher in a new wave of VIE model enterprises implementing dual-class equity structures and returning to domestic listings.Existing scholars have made abundant achievements in the study of dual-class share structure,but few studies have focused on VIE(Variable Interest Entities)enterprises to explore the corporate governance effect of dual-class share structure.Based on this background,this paper focuses on "the motivation of implementing dual-class share structure and corporate governance effect in VIE enterprises",and selects Ninebot as the research object which is the first domestic company which retaining the VIE structure and implementing the dual-class share structure.This paper is going to provide decision-making reference for VIE enterprises when setting up ownership structure and provide reference for corporate governance issues in VIE model.Based on literature review and theoretical analysis,in the motivation analysis,this paper focus on analyzing Ninebot’s motivation for implementing the dual-class share structure from the perspective of corporate governance.This paper proposes that one of the motivation is to alleviate the corporate governance risk in VIE model,including double moral hazard risk and board governance risk caused by VIE model.Another motivation is to maintain core human capital under the VIE model to carry out long-term strategies and improve the level of corporate governance.Based on motivation analysis,this paper further studies the corporate governance effects of the implementation of dual-class share structure for Ninebot in the VIE model,containing structural and outcome elements,namely corporate governance quality and corporate governance performance.The quality of corporate governance can be analyzed from three perspectives including the board of directors,shareholders and management governance.In terms of corporate governance performance,combining with the characteristics of strategic emerging industries of Ninebot,besides financial performance,innovation ability is introduced to investigate non-financial performance.The research found that the implementation of the dual-class share structure in Ninebot has shown positive feedback in corporate governance effect.In terms of corporate governance quality,the level of board governance is improved,the ownership structure is concentrated,and the management efficiency is improved,which optimizes the corporate governance structure.In addition,a reasonable corporate governance structure is finally fed back to the level of corporate governance performance.The financial performance was improving and innovation ability showed strong advantages.Finally,in order to better play the positive role of the dual shareholding structure,it is proposed to improve the founder’s own professional quality and decision-making ability,improve the protection mechanism for the interests of small and medium investors,and improve internal and external supervision mechanism.