Chinese Listed Companies Holding The Right To Control Over The Value Of The Company

The difference of character and shareholder structure will lead to the different allocation of holding rights and control rights,which will also lead to the differ in controlling shareholder's action, principal-agent relations between controlling shareholder and minority shareholder,the activity of coperate management,the mechanism of coperate control,and finally will lead to the different appearance of coperate valuation. It's significant to study the holding rights,control rights and its influence on corparate valuation,which not only can enhance the comprehensive competitive ability of our listed company ,but also can carry out the stategy layout of stateowned asset and promote the performance of capital market. Base on this,We analyze the influence of holding rights and control rights on corperate valuation,furthermore we study the influence of different character holding share on corperate valuation and also discuss how the different character holding and controlled shareholding affact corporate valuation in both competitive and uncompetitive industry. In our text, we first review the basic theory of holding rights,control rights and corperate valuation,at the same time analyze the holding rights,the allocation of holding rights and its influnce. Then from the vertical and cross section analytic viewpoints,we look through the historical development and structure of the holding rights and control rights of the listed company in China in order to do further empirical research on its influnce mechanism. At last ,we give some suggestions on how to advance the corperate valuation of listed company based on shareholders structure.The conclusion of this text is as followed.No matter in the whole industry or the competitive industry ,the control rights of controlling shareholder and corperate valuation both show as the converse U-shape,but in the uncompetitive industy the relation between the proportional of holding rights and corperate valuation display as positive linear correlation. The corperate valuation is higher in competitve industry than in uncompetitive industry,also the the controlled corperate valuation of individual and private company is the highest in the competitive industry,moreover, the corperate valuation of national and stateowned company appear relative better. The relation between control holding proportion of finail control shareholder and corperate valuation appear negtive correlation,but the relation between the proportion of cash flow and corperate valuation appear positive,still the the positive correlative coefficient is low.The deviation of holding rights and cash flow compared to corperate valuation appear negative correlation.The negative correlation coefficent between the holding rights proportion of unstateowned shareholder is the largest,meanwhile the stateowned shareholder is the smallest. We also find out that both ih the holding rights and the allocation of the control rights,the balance between the second to the fifth big shareholders and the controlling shareholders is the most notable reason on the change of corperate valuation,but the influence coefficent is weak. Fulfilling the thorough circulation of listed stock,also said as complishing the reform of stock right has prominent positive influence on corperate valuation.Based on the conclusions from above theoretical and empirical analysis, the policy implication was proposed, which is about improving corporate valuation mechanisms by taking advantage of holding rights and control rights correctly. First, improve internal control system in the corporation, including proceeding the implementation of the strategic reorganization and the layout plan of state-owned economy, discourage state-owned corporations and encourage private-owned firms to enter into competitive industries, encourage state-owned corporations and discourage private-owned firms to enter into uncompetitive industries.Second, cultivating corporate and institutional investor and elevating the status of equity checks and balances mechanism in corporate governance and valuation; improving the enviornment to protect medium and small investor; Establishing Incentive Mechanism. Third, establish and improve external control mechanisms for corporations, such as takeover market, competitive agent market for corporate management, creating fair and efficient market environment, law and government actions.The main innovations are as follows:First, this paper fills the revised holding rights data gaps for listed companies in China, which based on the relevant relationship of top ten shareholders. All data terminal systems in China can only supply the direct holding ratio of the top ten shareholders of listed companies, ignoring other various complexities, such as indirect holdings and cross-shareholdings. The necessity for this revision is that, we can avoid mistakes such as distorting the ratio of holding rights, identifying controlling shareholder wrongly.Second, this paper studies the impact of revised holding rights to corporate value in perspectives of both competitive and uncompetitive industries. And, the conclusion drew form this study is very referential for the strategic reorganization and the layout plan of state-owned economy.Third, in this paper, the data collected is based on more than 1000 listed companies for four consecutive years, 2004-2007, involving 4409 copies of the audited annual reports. The author collected and collated annual reports of each family every year by herself. So the sample database adopted in this paper includes a large number of companies in various industries in a long time-span. It is hoped to help and improve similar studies in China.Fourth, this paper assesses and evaluates the importance of the two key elements to corporation values, which are market competition and full circulation of shares, in the perspective of the impact of holding rights to corporate value. And, it is believed that, for those listed companies finished split share structure reform and paid considerations of equity reform, their major and minor non-tradable shares should be allowed to come into circulation on time. It's improper to set new restrictions to them according to the capital market fluctuations.