Shareholding Structure And Corporate Governance Behavior: From Empirical Research

The prominent characteristic of ownership structure in Chinese listed companies is the separation between tradable shares and non-tradable shares. The non-tradable shares, which take 2/3 in the total shares, are highly concentrated in the hands of the state and the legal persons. The tradable shares, which take the rest part in the total shares, are dispersedly held by many small and medium sized investors. Thus the ownership structure shows two sides (i.e. concentrated one and dispered one), while the different shareholders have distinct targets. Under such a condition, Chinese listed companies are faced with complicated agent problems. The agent problems raised by the shareholding structure will ultimately have influence on the performances, the governance structure and the behavior of Chinese listed companies. Both the foreign and domestic scholars have studied the related problems in China's stock market, e.g. Xu and Wang (1999), Sun and Huang (1999), Zhang (2000), Wu (1998, 2002, 2003), Tian (2001) and Huang (2004). But most of those empirical researches are limited in the relation between ownership structure and performance. Only few scholars have given their attention to a broader field. At the same time, the samples in the past researches are different from the current situation with the lapse of time, so that some past results need to be reexamined. Considering the above background, the author tries to use the agent theory and the shareholding structure in 1998-2003 to connect the relations between the ownership concerntration and constitutes and the performance, the inner governance structure and the behavior of public companies. Based on the concerning literatures, the author use a method combined the normaltive analysis and the empirical analysis, the qualitive analysis and the quantitive analysis, the comparative analysis and the integrated analyis. This paper consists of the following six parts: Chapter one, Introduction. The research background and purpose are first introduced. Then, the study method and the main contents are discussed. At last, the innovations in this paper are analyzed. Chapter two, Analysis on the Ownership Structure of Chinese Listed Companies. This section makes statistical analysis on the features and evolving process of state, legal person and tradable A shares in 1994-2003. In the research, all the shares are classified according to the year, the size, the district and the industry. The results show the the three main characterists of the shareholding structure are: diverse stocks, unbalanced distribution and high concerntration. The stocks distribute differently on size, district and industry. The state shares (FST), however, are dominanted in most cases. Chapter three, Effect of the Shareholding Structure on the Corporate Performance. Based on the panel data set of shareholding structure from 1998 to 2003, this section makes a regression between the performances (CROE and MBR) and the shareholding structure. It shows that the ownership concentration is negatively related with the performance; FST is negatively related with the performance; the legal person shares (FLP) has a converse U-shaped relationship with the performance; and the tradable A shares (FTA) is positively related with the performance. Chapter four, Effect of the Shareholding Structure on the Corporate Governance Structure. By using a panel set, this section analyzes the influence of shareholding structure on the inner governance structure (the structure of the board of committee and the managerial compensation). The results are: the ownership concentration is negatively related with the scale of BOC and the proportion of independent directors, but positively related with the combination of CEO and the board chairman (CEODUAL); FST has a converse U-shaped relationship with the scale of BOC, a negative relationship with the proportion of independent directors, and a positive relationship with CEODUAL; FLP has a converse U-shaped relationship with the scale of BOC, a positive relationship with the...