A Study On The Agency Problem Of Controlling Shareholder And Allocation Of Financial Power Of China's Listed Companies

Recently, large numbers of facts and researches indicate that the most leading agency problem is not between manager and shareholders, but between controlling shareholder and minority investors, which is the core issue of corporate governance and the new field of corporate governance research.Using the latest research in New Institutional Economics such as Property Rights theory, the Stakeholder theory and so on synthetically, making use of the research approaches such as contractual analysis, normative analysis, positive analysis, comparative analysis and so forth, Along the way"theoretical research——analysis of actuality——countermeasure research", This paper studies systematically on the issue"agency problem of controlling shareholder and allocation of corporate financial power of China' s list companies"from the following:Firstly, after reviewing the existing research on the issue, employing economic analysis approaches, this paper analyzes systematically agency problem of controlling shareholder and allocation of corporate financial power in theory. The paper argues that the root cause of the controlling shareholder agency problem is separation of cash flow right and voting right, deprivation of controlling shareholder depends on a good many factors such as law environment, supervision of government and so on. Corporate financial power is the core of corporate ownership, allocating corporate financial power properly makes for reducing transaction cost and overcoming externality. Of course, following the"the stakeholder cooperation"logic and establishing corporate governance mechanism which combines co-governance and contingent governance are required. There is a close internal relationship between behaviors of controlling shareholder and allocation of corporate financial power. Corporate financial power is the core of despoilment of controlling shareholder, excess control of corporate financial power leads to depreciation of controlling shareholder on other stakeholders, but proper allocation of corporate financial power helps to retrain the depreciation behavior.Secondly, Basing on actuality analysis of agency problem of controlling shareholder and corporate financial power of China's listed companies, from financial power this paper introduces independent variables such as size and structure of board of directors, ratio of debt and corporate performance and so on, selects corporate size and growth character as command variables, and analyzes empirically the actuality of agency problem of controlling shareholder of China's listed companies. It concludes that average private benefits of controlling shareholder of China is close to that of burgeoning market economy countries, but much higher than that of developed ones, which is influenced negatively by law and institution, corporate performance, ratio of debt, share proportion of outside large shareholders, proportion of circulating shares and structure of the board of directors, but has positive correlation with share proportion of controlling shareholder and size of the board of directors.Finally, this paper compares and analyzes the two different international allocation modes of corporate financial power which restrain the depreciation of controlling shareholder; then according to the development requirement of social market economy, referring to international experience, in the framework of incomplete contract, a set of effective institutional arrangements is suggested from aspects such as capital structure and governance mechanism of corporate, law and institution, supervision of government and merge market and so forth, which helps to allocate corporate financial power properly and resolves the agency problem of controlling shareholder of China's listed companies.