The Study On Capital Market Mechanism To Solve Agency Problem

Under the modern business mechanism, owing to ownership separating from control right, assets'agency pursues one's own interests and inclines to damage the interests of assets owner unavoidably, and that is the agency problem, which is discussed frequently in modern enterprise's theory. To solve the agency problem, it is necessary to set up effective restraint and incentive mechanism, among them, the capital market system is the external constraint mechanism of solving the problem of agency. As the external institutional design of the modern corporate governance structure, the control mechanisms of enterprises that the capital market take on, should obey the goal that clients choose and monitor the agency. To solve the agency problem, capital market depends on the pricing mechanism of the stock and the mechanism of control right transformation mainly. The capital market of our country is still not perfect, and it is very difficult to restrain the agency problem through the capital market effectively. The security market of our country has only provided a financing channel for enterprise, and the invalid information transmission making stock price mechanism unable to give full play to the role of restraint of the administrator. In the control right transformation market, it is unable to restrain the manager's behavior effectively even by the method of M&A or proxy contests. This paper, through carrying on normative research and empirical research on agency problem of the listed company mainly, probes into the basic way of utilizing the capital market to restrain the agency problem in our country. There are three chapters in this paper besides foreword and conclusion. In the foreword, it introduces this paper's structure and the background of choosing this subject matter. The first chapter mainly puts forward the question, and summarizes the existing research results. It analyzes to the agency problem of the listed company on the basis of drawing lessons from foreign relevant research. Chapter two probe into the restraint function on the agency problem of capital market. In this chapter I discuss stock right mechanism and control right transformation mechanism separately. Chapter three studies on how to utilize the capital market to solve the agency problem in our country. It discusses how to set up the modern business mechanism, and the necessity and the limitation of utilizing the capital market to restrain the agency problem during the special period of economic transition of our country. Chapter two and chapter three are the key contents of this paper. In the conclusion,I sums up the main view that this paper is putting forward, pointing out the problem existing and the direction of further study.