Ownership Concerntration, Outside Blockholders And Firm Operation

It is the core of modern enterprise system to establish a perfect corporate governance system which must be able to limit the right of the management, coordinate the benefits of stakeholders, strengthen the competitive capacity and raise firm's performance. Ownership structure is one of the most important branches of the corporate governance theoretical study, which is concerned to whether and how different ownership distribution can influence the efficiency of corporate governance.It is common for state owned companies being listing through remolding with the stock system that state shares and artificial person shares hold all the trumps in the overall shares of companies. In recent years, with the increase of private listed companies, the phenomenon that mitiators of private listed companies hold the most shares of the companies has become more and more prominent. Therefore, it is prevalent that big shareholders infringe upon the benefits of small shareholders. To study the influence of ownership concentration on the efficiency of corporate governance is especially more important than other problems in the field of ownership structure studies and has been an hot point of ownership theoretical study.Based on the prior studies, the thesis chooses the A-share listed companies in Shanghai Stock Exchange as samples for the period through 2002 to 2004, determines the proxies for listed companies' operation as the explained variables, takes ownership concentration ratio and ownership balance ratio as the explaining variables, and takes firm size as the control variables. Then, the thesis establishes a multi-element regression model and use OLS regression analysis to conduct an empirical research on the influences of ownership concentration ratio and ownership balance ratio on the operations of listed companies.The empirical results indicate that there is a significant positive relationship between ownership concentration ration and operations of listed companies, which is reflected by the difference of financial indexes between different ownership concentration ratios. Besides the controlling shareholders, the existence of outside big share holders can effectively improve the performance of firms;therefore there is a positive relationship between ownership balance ratio and performance of listed companies. Otherwise, there is a positive relationship between firm size and performance of listed companies.