Control Arrangement And Institution Design Of China's Listed Company

Control rights of company are an economic power which leeched on and derived from independent personality of company. Control arrangement of listed company is the kernel and sticking point of corporate governance mechanism. It is the key problem to improve firm performance and protect investors' benefits that how to allocate reasonably listed companies' control and impel effectively control transference. Especially in China's listed companies, the phenomena of administrative interference and insider-control is terribly severe, therefore control arrangement appears very important.The paper emphases on three aspects of China's listed companies' control arrangement, namely, elementary allocation of control, private benefits of control and transference of control. The development of China's listed companies' control arrangement is a cycle evolvement process impelled by competitive interest group; different behavior modes of various interest groups posed different modes of control allocation and transference. It can be say that it is the institutional problem that formed a serious of problems in China's listed companies' control arrangement. The paper put forwards that for the construction of optimized model of China's listed companies' control arrangement, measurable institutional system can reduce individual's information cost and harmony cost of organization and restrict opportunism behavior.The original allocation of control is a state of balance among contractual stakeholders; the imperfection of contract caused the original allocation of control very important. From the function of China's listed company, we can found out that share-control is no longer equal with control. That is to say, listed companies' control did not allocate to matter-capital owners that hold high proportion of shares. With the development of new enterprises, the allocation of control showed everywhere the importance of human resources and stakeholders in corporate governance. In the study on the allocation of control in chapter three, the paper put up theoretical discussion on different control patterns indifferent corporation institutions; then combined with the development of new enterprises, by using of Robinstein's alternative pricing negotiation model, the paper processes game analysis on the dynamic transference of control between the owner of substance owners and human capital owners. Afterwards, the paper analyzes the theoretic basis and routes on which human capital owners and each stakeholder participate in control.The newest investigation results showed it is a common phenomenon that shares are centralized in most countries. There are controlling shareholders in listed companies; and controlling shareholders can reduce client-agent problem brought by managers in certain degree but they also can utilizing control to expropriate private benefits and damage listed company and other shareholders' interests. Intensification of the protection of minor investors is the core of modem corporate governance. China's economy system is of shunt period, such vice events as financial fake, hostile invasion and controller escape is in succession, therefore the protection of minor investors' interests is pressuring in China's listed companies. In the study on private benefits of control in chapter four, the paper reviews the transference process from traditional corporate governance to modern corporate governance; analyzes stress the core problem in modern corporate governance; and then combined with the evolvement of the theme of corporate governance, put up criterion analysis in theory on block shareholders control in China's listed company. On the basis of the theoretical analysis, from the angle of cost-benefit, the paper take model and empirical analysis on controlling shareholders' expropriation. Furthermore, the paper take empirical study on the private benefits of control and put up multi-element linear regression analysis on its influential elements; then put forwards some relevant suggestions on the restriction on block shareholders' exploitation and the protection of minor investors' interests.The paper concentrate on the private benefits of control in chapter four and point out that it is because control itself possesses certain value, shareholders can manage, dominate and utilize various resources to obtain economic benefits through the grasp of control. Therefore control becomes the object that conflicted by various stakeholders and the transference and dealing of control forms the market of control. The existence of the market of control make control can be redistribute among each stakeholders and let most listed company feel the stress from the market of control. The most obvious function mechanism of the market for control rest with the endowment of the freedom in shareholders' voting with feet and let them exit the stock market. Under the incomplete background of China's capital market function mechanism, the market for control have important effects on the promotion of the development of manager markets and the perfection of corporate governance mechanism as the important constitution of exterior corporate governance. In chapter five, the paper process theoretic analysis on various transference route and mechanisms; and then takes comparative case analysis on different control transference modes. This chapter aims to reduce various irrational behaviors and promote the healthy development of the market for control in China's stock market in virtue of various institutional arrangements.The corporate governance and control arrangement of China's listed company is developed and evolved with the embedment of the state-owned firm reform and the development of security market. With the assimilation of advanced elements of developed countries' corporate governance, it possesses obvious route-dependent character. For instance, the absence of state-owned shares' owner; insiders' control commonly existed in firms; co-existence of various quality shares; the severe exploitation of controlling shareholders on exterior investors; the concentration of shareholders and the division of the stock market and so on. Therefore, to put forward the review and research on control arrangement of China's listed company, it must be combined with the evolvement process of China's firm control arrangement and the unique institutional background surrounded listed company. On the basis of the thorough discussion on the original allocation of control, the private benefits of control and the transference of control, in chapter six, the paper bring forward that listed company control arrangement is a institutional design problem, including the certainty of the basis of control, the construction of control department, the allocation and transference of control. Various formal and informal institutional environments have important influences on control arrangement. Through thorough analysis on the character of control arrangement and its institutional foundation stone, the paper put up optimizing design on institutional innovation model of China's listed companies' control arrangement. In all, the paper aims at to promote the healthy and orderly development of China's stock market.