Empirical Research And Forming Mechanism On Expropriation Behavior Of Controlling Shareholder

Corporate governance is one of the determinants that restrict the competitiveness of enterprises, and the key factors that ensure the sustainable development and high-speed growth of enterprises. Now,corporate governance research has gone beyond the management scientist's perspective, and become the focus of the problem in the field of economics, engineering management, law, sociology. But, scholars have found that equity concentration is dominant form of global corporate ownership structure and most countries ownership structure. From then on, the core issue of corporate governance research has changed, from the agency problems between executives and shareholders to agency problems between controlling shareholders and minority shareholders. The core problem is concerned about expropriation behavior of controlling shareholder between controlling shareholders and minority shareholders. Chinese economy is in the period of the transition, and equity concentration is more prominent, but external legal and securities regulatory system is not perfect like many developing countries. Controlling shareholder has broad space in order to expropriate the interest. How to effectively inhibit expropriation behavior, has become urgent need to resolve key issues in the corporate governance, property rights system and capital market the background of the transition economies. In additional, there is little Chinese research in this field. This shows that there are still more problem in need of research and confirmation about expropriation behavior of controlling shareholder in China. So, this article researches China's listed corporate expropriation behavior of controlling shareholder, including 5 parts.In first part, there is research problems presentation, literature review, research significance and the scope of the study.In second part, it researches the forming mechanism on expropriation behavior of controlling shareholder based on basic theory. About this problem, there are a few researches. This article analyzes expropriation behavior of controlling shareholder over the formation mechanism from theory, obtained the reasons for the formation of expropriation behavior of controlling shareholder. Then, it reasons according to mathematics. This part is theoretical basis and the foundation for following empirical research and measures to curb expropriation behavior of controlling shareholder.In third part, there are empirical researches, including research of expropriation behavior of controlling shareholder based on law and collusion theory. In the research of private benefits based on law, empirical research shows that the legal environment influenced effect is still to be improved, although the legal environment had become more and more perfect. In the research of private benefits based on collusion theory, empirical research shows that top management compensation is significantly positively related to expropriation behavior of controlling shareholder, but the managers'non-pecuniary compensation is negatively related to expropriation behavior of controlling shareholder. The more top executive receives non-pecuniary compensation, the less the controlling shareholder gets the private benefits. this is consistent with the distribution of benefits in collusion, or illustrates there is collusion between top executive and controlling shareholder in order to abstract interests of minority shareholders, but also there is the competition because of the distribution of profits. Both top executive compensation and non-pecuniary compensation are significantly positively related to expropriation behavior of controlling shareholder, indicating the higher executive get profit, they may assist in controlling shareholders predatory more interests of minority shareholders. Therefore, from the perspective of controlling shareholders, there are both the joint and competition between controlling shareholder and top executive in order to capture the more interests.In forth part, this article puts forward policies and proposals about prevention from expropriation behavior of controlling shareholder. According to the empirical results and forming mechanism, prevention from expropriation behavior of controlling shareholder is a complicated system. It must be integrative harmonization and comprehensive balance from the listed companies, controlling shareholders and minority shareholders. Therefore, it is necessary to strengthen the legal and moral construction, but also the need to strengthen corporate internal governance measures. Need constantly innovate the content and enhance the law enforcement in strengthening the legal construction, beside moral construction according to American experiment.In improving the corporate internal governance, need to constantly optimize the ownership structure, improve the independent director system and expand the scope of the board of supervisors selection, in order to weaken the status of controlling shareholders, enhance the independence of the executive and role of small shareholders, establish a harmonious culture of equity, achieve equality among shareholders, and inhibition controlling shareholders to obtain expropriation profits.There are research conclusion, innovations and future prospects in fifth part.There are 5 figures, 16 tables, 256 references in this article.