Equity Structure And Corporate Performance Of Chinese Listed Companies

The equity structure and corporate performance of listed companies has been being a hot topic and a difficult problem being focused by both the academia and empirical researchers, but the conclusions reached differ greatly as there exist different perspectives on this subject. Thus, it is an important problem demanding prompt solution and the systematic research results are expected to be given. This paper took the listed companies of domestic manufacturing industry as objects, through analyzing the data of equity structure and corporate performance published by the companies, to revel the relationship between equity structure and the corporate performance for the purpose of setting up a practical model suitable for China and consummating the theory and methodology for the equity structure and corporate performance of listed companies.This study has immediate significance for the listed companies to draw out development strategies, optimize the equity structure, raise the corporate performance, and to intensify the core competitiveness. It can provide the theoretical basis for the governmental administrations to make and adjust policies in time and for the investors to decide the investing direction. Meantime, this study can also accelerate the reform of state-owned enterprises and establishment of modern enterprise system.Based on the review of related literature, the status and causes of equity structure of the listed companies in China and the characters of stockholder's behavior were analyzed and the concept of equity structure was defined. Whether the equity structure significantly affects corporate performance was emphatically studied according to the operational mechanism of joint stock system, agent theory and the finance indicators of cash flow etc.Totally 303 listed manufacture companies were chosen as samples and 6 variables of equity structure and 7 variables of corporate performance were defined. The 'net cash flow from operating activities/net profit', a cash flow indicator that is emphasized both at home and abroad, was first time to be treated as one of the variables for corporate performance. The listed companies of manufacturing industry were grouped according to their asset scale and industry property. The empirical study of equity structure and corporate performance were carried out through combining the empirical analysis and theoretical analysis and by using stochastic variable intercept paral data mode and SAS software package. Twelve models of the relationship between equity structure and corporate performance were creatively established for subgroups of listed companies, namely machine, metal, medicine, and food. It was demonstrated by these models that the equity structure had significant effects on the corporate performance in the 4 subgroup listed manufacture companies. In meantime, the empirical study results were further analyzed in the paper.