An Empirical Study On Ownership Structure And Corporate Performance In Chinese Listed Firms

Since it is a prevalent characteristic of ownership structure in Chinese firms that shares are concentrated in a few large shareholders, investigating whether ownership concentration has impact on corporate performance, and if yes, how will the impact be, is a significant issue for ownership structure researches in China and has arose much attentions from academe. The purpose of this paper is to properly interpret and generalize empirical conclusion via examining the impact from multi-angle, thus provide definite reference and instruction value for ownership structure governance mechanism practice. This paper, firstly, introduces the history, early theoretical hypothesis and recent newly advancement of ownership structure research, narrates ownership structure research in USA separately, and does a comparative study on vast worldwide empirical studies on ownership concentration. Then, via empirical tests on samples, this paper examines the impact of ownership concentration on corporate performance in short term and long term, and under various competition situations. Also this paper discusses on empirical results preliminarily and draws a conclusion. Lastly, based on anterior conclusion, this paper puts forward five policy proposals.Empirical study shows that, in short term, there is a quadratic curve relation between ownership concentration and corporate performance measured by market index; While in long term, the impact of ownership concentration is insignificant. It is evident that monitoring and expropriation effect of large shareholder increase alternately in short term, while many other factors could exert fully significant impacts on corporate performance in long term, where the impact of ownership concentration is trivial. Under regionally perfect competition situation, ownership concentration significantly relates with corporate performance, but the relationships vary substantially according to different ownership concentration variables. Under monopoly situation, there is U shape relationship between ownership concentration and corporate performance, and impacts on other corporate performance variables are insignificant. Differences in shareholding structure of corporate top ten large shareholders and firm heterogeneity, determine that the position and role of individual large shareholder differs, thus impacts of ownership concentration vary.Taken above conclusion into consideration, this paper brings forward the following policy proposals: Keep proper ownership concentration degree; Evolve multipleunit equity ownership mainstay within limits; Heighten circulation rate of corporate stock; Strengthen legal system and supervise regulations on security market; Intensify external constraint of capital market on public listed firms.