| With the development of the corporate governance theory, traditional research is mainly based on the equity in the highly fragmented which leads to the agency problems between lead managers and outside shareholders. But in recent years, many scholars found large-shareholders concentrated ownership, and they have enough power to control the listed companies in order to make the various decisions for their own interests, transfer the resources from small-shareholders of listed companies to their owner company. The focus of agency problem of modern corporate governance research shift from manager damage shareholder to the control shareholder occupies the interests of minority shareholders. According to the point of view of property economics, ownership arrangements and institutional environment will affect the economic behavior in some extent. Therefore, the ownership arrangement as the company’s most important governance mechanism is bound to affect behavior of control shareholders. Under the background of transitional economy in China, the listed companies are in the status of the super-control of large-shareholders. The ultimate shareholders as the actual controllers of listed company have a profound impact on the financial decision related with the benefit of control rights. At the same time, the ultimate shareholders of listed companies transfer resource from company through self-transactions, such as direct occupation of funds, debt guarantees, and misappropriation of company investment opportunities, even can dilute the sharehold of others to increase their equity, such as share issue dilution of other shareholders’rights and interests. Therefore, based on the governance mechanisms of institutional environment and board behavior, the study of ultimate shareholders affected internal mechanisms and properties of listed companies tunneling, can effectively inhibit and reduce the ultimate shareholders tunnelling, and protect the interests of most medium and small investors.This paper mainly uses the packet analysis method to study the impact of the control right, board behavior and institution environment on the tunneling from the perspective of ownership property. This article uses the methods of normative research and empirical research. The problem is posed in the first section’Introduction’, in which the research object, content and contribution are clearly shown. The second sections’Literature Review" reviews the related theories and literatures of tunneling at home and abroad, analyzes the effect of institution environment and board behavior on tunneling. The third section is ’Analysis of mechanism and characteristic of ultimate shareholders tunneling’, which describes the actual situation of the ultimate shareholders tunneling, which leads the research in the light of the specific conditions in our country. The forth section’Theoretical analysis and model construction of ultimate shareholders tunneling’ shows the relationship between institutional environment, board behavior, percentage of ownership and tunneling, provides the theory basis for the follow-up study:The fifth section’Control rights, controller changes effect on ultimate shareholder tunneling’ is based on the samples of Chinese listed companies over the period2005～2009, study the impact of control right over the tunneling through empirical analysis. The sixth section’Board behavior effect on ultimate shareholder tunneling’is based on the fifth section, joining the factors of board behavior, study the impact of control right on board behavior, which leads to impact on tunneling through board behavior; The seventh section’Institutional environment effect on ultimate shareholder tunneling’ is based on the fifth section and the sixth section, joining the factors of the institutional environment. Study the impact of institutional environment on control right and board behavior, which leads to the impact on tunneling; Combined with principal component analysis method to study the impact of institutional environment, board behavior and control rights on tunneling. In the ending section’Conclusions and Policy Recommendations’, conclusions are drawn and recommendations to the politics with respect to the tunneling from Chinese listed companies are put forward. At the same time, the limitation and prospect are also discussed. According to theoretical and empirical research above, we come to conclusion that:Fisrt, the phenomenon of funds occupation of listed company still exists and shows a growth trend recently. On the one hand, the occupied formal was transferred from the traditional purchase and sale of related business to the hidden guarantees, leasing business and so on. On the other hand, the production and management related transaction volume increased year by year, prepayments and accounts receivable are easier to form the phenomenon of funds occupation.Sencond. theoretical models indicates that the relations between sharehold proportion of ultimate shareholder and tunneling is like inversed U shape, which means that sharehold proportion does tunneling and supervision. When the shareholder holds was less than some extremism, with the increase of sharehold proportion, their may take more tunneling. While shareholder is above a certainly extremism, it will produce convergence of interests’ effect. Does not consider other cases, legal system and the perfection of corporate governance will contribute to the inhibition of the tunneling behavior.Third, differences of board behavior in listed companies of different nature affect the tunneling. Compared with the non-government-controlled companies, the independence of board of government controlled companies is worse, herd behavior is more pronounced, and lower diligence. Further, the independence and diligence of board in companies of municipal government and below controlled are lower, herd behavior is more serious, resulted the most serious tunneling. The provincial government-controlled company followed, and the proportion of tunneling in central government controlled is lowest. In the non-government controlled companies, the independence and diligence of capitalists controlled companies is lowest, and herd behavior and tunneling is the most serious. The companies controlled by entrepreneurs have the least impact.Fourth, the characteristic of ultimate shareholders’control right has a direct impact on tunneling. Control right, cash flow right and excess control more reflect the entrenchment effect, and the synergistic effect of cash flow right is not significant. In the government controlled companies, the lower of the government control level, the stronger of entrenchment effect. Compared with the listed company controlled by the capitalists, the entrenchment effect is lower in the entrepreneurs controlled companies. The foreign controlled companies don’t show significant effect.Fifth, the independence of board is affected by the ownership property and control right, thereby affecting tunneling. The independence of board decreases as the proportion of control right increases. Government control had a significant impact on the independence of board, which means the independence of board in the government-controlled companies is lower. Meanwhile, in the government-controlled companies, the effect of control right decreases as government control increases. The role of control right in entrepreneurs controlled companies is the most significant, government-controlled companies followed.Sixth, the herd behavior of board is also influenced by the ownership property and control right, thus affecting the tunneling. A positive correlation is shown between the control right and the herd behavior of board. Government control generates a significant influence on the herd behavior, which means board behavior in government controlled companies is easier to have herd behavior. However, the impact of control right on herd behavior is not significant.Seventh, the diligence of board is related with the ownership property and control right. and has impact on tunneling. The diligence of board is negatively related with ultimate control right. Government-controlled has a significant impact on diligence of board, and the diligence of board was lower than the non-government controlled companies; as the level of government control increases, the effect of control right is more pronounced; However, the control right of entrepreneurs control and foreign-controlled companies is not obvious. It also shows that the board members have a higher diligence.Eighth, institutional environment have a significant impact on tunneling. As the higher degree of market, the smaller degree of government intervention, the higher level of law. the lower probability of tunneling; the strongest inhibition of the market index, and the minimum of law; Due to the advantage of government political rights, government controlled companies affected by institutional environment is less than non-government controlled; The institutional environment does the most impact on tunneling of provincial government-controlled among government controlled companies; Among non-government controlled companies, institutional environment does negative impact on tunneling of capitalists controlled companies, and the market process and government intervention do negative impact on tunneling.Ninth, the ultimate control right does differences in different institutional environment. In higher degree of market areas, more capital joining listed companies, it will weaken the ultimate shareholder control right to some extent, and their behavior will be exposed under the sun, thus inhabited tunneling. In higher degree of government intervention areas, the possibility of government getting into listed companies will increased, which resulted in relatively centralized control right, and exacerbated tunneling; In higher rule areas of law. the equity and control right are relatively high, but the occupancy of non-operating funds is lower.Tenth, board behavior has significant differences in different institutional environment. The higher degree of market areas, the lower of government intervention, the higher level of law, the relatively stronger of independence of board, the lower of herd behavior, the higher of board diligence, so the less of tunneling.Eleventh, institutional environment, board behavior and ultimate control right have different impact on tunneling. Institutional environment, board independence and diligence have negative impact on tunneling, and the institutional environment is the more effective than board independence, ultimate control right in exacerbating tunneling.The innovation is mainly reflected in following four areas:First, the literature of tunneling currently in China mainly focused on post non-tradable share reform, this study just to make up the gap of after non-tradable share reform. Second, the listed companies are more perfectly divided into six type including central government controlled, provincial government controlled, the municipal and under government controlled, entrepreneurs controlled, capitalists controlled and foreign controlled. It is more comprehensive and integrated than previous study, and reduces possible endogenous problems. Third, using the indirect method to calculate the non-operating funds, which pay more attention to the hidden related transactions than the directly method. Fourth, characterizing the board behavior from the perspective of board independence, herd behavior and diligence has a certain novelty and practical.In the end, I had to say there is some limitation in this thesis. First, without in-depth studying the interaction between control right, board behavior and process of marketing, it’s making less understanding of the impact factors of tunneling. Second, with the development of capital market and control market, associated guarantee has risen to the most significant related transactions. There is no study on tunneling of associated guarantee. Third, due to the limitations of announcement board, it was not able to find a more appropriate indicator on herd behavior of board, and have a certain impact on study results. Fourth, the study object is to be further expanded, such as adding executives and political relations, the network structure of board. The above limitations will go to depth study in later research. |
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