An Empirical Study Of Listed Family Company's Influnce Of Ultimate Control Rights On Corporation Perfomance,Investment Decisions And Financing Decisions

Since the Reform and Opening,the rapid development of family business has become the main force of China's new economic growth point and occupies an important position in the national economy.When the family business has become an increasingly important form of listed companies,they are increasingly becoming the focus of attention of scholars.Based on evidence research,many scholars found that family control business is a fruitful organization and management.However,there are weaknesses about corporate governance.Currently,the ultimate controlling shareholder structure is a widespread phenomenon in family listed companies.They earn profits and plunder the interests of small shareholders through pyramid controlling structure.The research of ultimate controlling right thus has become one of the difficult topics about corporate governance.Chinese family listed companies have the same issue.The combination of theoretical analysis and evidence analysis were employed in this paper.This paper firstly organizes theories and relative literatures about ultimate controlling structure,influence on corporate performance,corporate investment decision as well as business financing decision.This paper then analyze the mechanism of separation of ultimate controlling right and Cash flow rights.On the basis of the previous theoretical analysis,this paper continues to conduct an evidence research of relationship between ultimate controlling right,cash-flow rights and corporate performance,then get the conclusions as below:(1)cash-flow right of Chinese listed family business concentrate in the zone of 10%-30%,accounting for 62.03% of all listed family companies.Mostly listed family companies' ultimate controlling right takes over 10%,and 60.19% listed family companies concentrate in zone 20%-40%,even more than 60%.It demonstrates the high controlling desire of Chinese family business.(2)it's obvious of separation of rights.Over 71.30% listed family companies' separation ratios locate in zone 0.5-1.The greater the degree of separation is,the easier to steal interests from small shareholders,the lower performance in companies.(3)There is negative correlation between ultimate controlling right and company performance;positive correlation between cash-flow right and performance in company;negative correlation between separation of rights and performance;higher percentage of shareholding ratio of ultimate controllers,higher negative influence on performance from separation of rights.Following evidence research on relationship between ultimate controlling right and investment conclude points as:(1)the investments of listed family company are influenced by cash flow.There is sensitivity of cash flow.There is positive correlation between financial benefits,development,organizational size and investment expenditure;there is negative correlation between asset-liability ratio and investment expenditure.(2)Excessive free cash flow stimulates the sensitivity of cash flow in the investment.(3)By increasing cash flow right of ultimate controllers,sensitivity of investment cash flow decreases.(4)By increasing separation of rights,sensitivity of investment cash flow increases also.(5)Liabilities do not restrain investment expenditure of listed family business.The last section of the paper discusses the relationship between ultimate controlling right and debt maturities decision from a static and dynamic perspectives.The conclusions as:(1)the separation of ultimate controlling right and cash flow right is widely applied in Chinese listed family companies.Higher separation ratio is,higher debt ratio is.(2)There is obvious negative correlation between debt maturities and separation of rights;negative correction between debt maturities and ultimate controlling right.(3)There is positive correlation between cash flow right of ultimate controllers and capital structure set rate.(4)There is positive correlation between power of ultimate controllers and capital structure set rate.(5)There is negative correlation between separation of rights of ultimate controllers and capital structure set rate.