Major Shareholders Of Listed Companies Support Behavior And The Effect Of Empirical Research

In the traditional sense,the research on the corporate governance issues usually bases on the ’principal-agent problem’ arising from the interest conflicts between the shareholders and the managers due to the Dispersed ownership of the firm. However, a large number of empirical studies have shown that the majority of listed companies in the world have a controlling shareholder which actively involves in corporate governance.The separation of ownership and management is not a universal phenomenon. At the same time, most of the controlling shareholder employ pyramid ownership structure to take control of the listed companies. A striking feature of the pyramid ownership structure is that it will lead to the separation of controlling shareholders’cash flow rights (ownership) and control right, which means the controlling shareholder can implement full control of listed companies with less equity investment. The existence of the control right premium provides the controlling shareholder with the impetus to hollow out the resources of the listed companies. This leads to a deeper level of agency problems in corporate governance research, which is the conflict of interest between controlling shareholders and minority shareholders. But at the same time, the study found that the pyramid ownership structure also provides controlling shareholder with the motivation and means to prop the listed companies. In other words, tunneling effect and propping behavior is symmetrical. Existing research on tunneling effect has a large number of demonstration and testing, but is not comprehensive enough to propping behavior. In China, the equity division reform has basically completed. With the arrival of the era of the full circulation, the interest of the controlling shareholder and the minority shareholders’is becoming more and more consistent. Implementation of relief to listed companies in financial distress and injection of high-quality assets into the listed company have been appearing, the resulting value of listed companies and investors return is an important content of this article.At the same time, institutional investors in the rapidly growing worldwide, becoming an important force to counterbalance the behavior of the controlling shareholders. With the substantial increase in the stake, the investment philosophy of the institutional investors is gradually shifting from the previous negative holding and voting with their feet to the’shareholder activism’ behavior. In order to achieve long-term excess returns, institutional investors will use their professional advantage to directly involve in the corporate governance of listed companies. Institutions such positive behavior would be listed on the company’s management that the results of what kind of impact, this article will use the data of listed companies and related software to conduct empirical analysis.In summary, the main researches are as follows:1, Firstly define that the object of this study includes the controlling shareholders and institutional investors, then discuss the two kinds of shareholders’ motivation and interests mechanism which attracts them to positively participate into corporate governance and decision-making. On this basis, compare the ’tunneling’ behavior and ’propping’ behavior of the controlling shareholder and analyze the motives and the path of implementation respectively.2, Identify the controlling shareholder’s equity structure arrangement which is the choice between the level holding structure and the pyramid holding structure. Through the portray of one or several representative listed company’s equity structure, trace the controlling path as well as the tunneling and propping behavior of the controlling shareholder under the pyramid equity structure.3, Proceeding from the maximization of the current and future utility of controlling shareholder, set up the path selection model of propping the listed company in financial distress. Through the model analysis, indentify the critical propping scale, and provide basis for decision making for path selection of the size of the controlling shareholders.4, Analyze the motives and modes of controlling shareholders of listed companies of assets injection, to focus on the mechanism of asset injection which financed by private placement. And using the event study method to discuss the path and the market reaction of assets injection5, Analyze the ability and the motivation of institutional investors to participate in corporate governance and find whether’shareholder activism’ is able to reduce transaction costs, improve corporate decision-making and improve the performance of listed companies.on the basis of Review of the relevant theory, design variables and function to conduct empirical analysis using WIND database data, to investigate the impact of’shareholder activism’on the performance of China’s listed companies and make a conclusion.Finally, this paper will focus on the above findings to raise relevant policy advices for decision making.