Market Environment, Ultimate Controlling Owner's Control Mode And Debt's Governance Effect

In China,majority listed family firm's ultimate controlling owners use "pyramid mode" to control their firms indirectly,while in minority family firms they use "level mode" to control own listed firm directly. To this question, here exists Legal System Deciding Theory, Reducing Government Intervention Theory and Financing Market Advantage Theory. These three kind of theories'debate have provided the first research question for this dissertation. That's, do legal system or government intervention or financial market influence ultimate controlling owner's control mode actually?Therefore there is a kind of conduction mechanism, namely "ultimate controlling owner's control mode→firm's property right arrangement→firm prestige→debt governance effect". In order to confirm this conduction mechanism, this dissertation has studied the second question:whether ultimate controlling owners control mode influences debt governance effect?Using modern property right theory, agency theory, information asymmetry theory, and this dissertation has taken listed family firm's data from the year 2005-2009 to study the above questions. To the first question, research has discovered that financial market level remarkable influence family firm ultimate controlling owner's control mode, that's, the more financial market which a family firm locates is backward, the more family firm ultimate controlling owner favors "pyramid mode". This findings support Financing Market Advantage Theory. To the second question, research has discovered that in "level mode" family firms did leverage hold governance effect, whereas not in "pyramid mode" family firm. Empirical findings have confirmed that the conduction mechanism exists.This dissertation has constructed a new theoretical analysis frame to clarify that leverage not be sured to hold governance effect. This dissertation also has utilized margin analytic method to prove there is a reverse U curve between maturity and debt agency costs,which means that maturity should avoid being in the top point of the reverse U curve. These researches not only have theory innovation, but also have reality guiding significance.