A Research On Corporate Control And Corporate Performance--Evidence From Chinese Listed Companies

With the development of China's stock market and the improvement of China's listed companies, the function of corporate control on corporate governance is emphasized and the allocation of corporate control is becoming the hard core of corporate governance. The corporate performance can be improved through reasonably allocating of corporate control rights and transferring of corporate control. The paper starts with dissertating the theory of corporate control and proceeds with discussing different levels in the allocation of corporate control. The relationship between corporate control and corporate performance is observed through theoretical construe and empirical study. Further, the paper analyzed the problems of Chinese listed companies and intends to put forward the better governance mechanism and improve the performance of listed companies.The paper probes into the evolvements of the theory of corporate control first, the connotation of corporate control is given and how to realize and enhance corporate control is discussed. To the question of subjective definition of control in literature we can see, we redefine the corporate control and construct quantitative analysis method of control, and then we calculated the control threshold of Chinese listed companies. According to the theory above mentioned, one shareholder with relevantly minor share of stock can control the company with great probability if other shareholders own dispersed stocks. Due to the separation of ownership and control, ownership is not always equal to control; we reckon the voting rights and control rights separately in pyramidal structure of companies. Whereas the pervasiveness of private benefits of corporate control and exiguity of the measurement of private benefits of corporate control in existing literature, wecompared different methods of how to measure the private benefits and pointed out the deficiency of existing research, and then we set up the database according to the fact in China and calculated the private benefits of corporate control. We find the level of private benefits of corporate control in China is quite high and is similar to other emerging markets. Firm size, transaction price, ratio of liabilities to asset, ratio of return to asset and net asset per share can affect the private benefits of corporate control. The determinants of are observed and regressed.The paper then construed the interaction between internal and external control mechanism from the point of view of control chain. Management, directors, middle managers and ordinary staff not only are participants but also players in internal control mechanism, at the same time, investors, auditors, supervisory agencies and law enforcers have different effects on companies in external control mechanism, the markets for corporate control is one of the most important elements in external control devices, and merger and acquisition is of importance in markets for corporate control. The pattern of allocation of corporate control is different and is quite rational in spite of widely discrepancy in economic development, cultural environment and law enforcement around the world.The key point of allocation of corporate control is how to realize the equilibriums among shareholders, the board of directors and management. For this, we construct one model of the allocation of corporate control according to the juridical system in China. We stratify the allocation of corporate control into three levels. In the level of shareholder, we explore the threshold of control and redefine the control in company rather than utilize the subjective definition of control in existing literature. In the level of the board, we use duality to indicate the enhancement of control because we can not ascertain who is the director assigned by shareholder in China. In the level of management, we focused on the selection of management and let it be one indicator of corporate control in management. Anyway, all of the allocation of corporate control have effects on corporate performance, thus we extend ou...