The Control Right Of Chinese Listed Companies And Corporate Performance

With the development of capital markets, the ownership structure of listed companies become more and more complex, and the shareholders often do not have effective control in the hands directly.La Porta et al, put forward the concept of the actual controller, so more and more researchers transfer their researcher from the direct ownership structure to the actual controller of the corporate while carrying out research of corporate governance, but most did not consider the different nature of the actual controller. Some people classified the control right simple. While the calculation of the control right indices is diverse, there is no uniform, objective and convincing measurement method. Furthermore, the research about the impact of control right on corporate performance has no conclusion.To solve the problems above, this paper, based on previous studies, improves the measurement method of control right, and calculates the data of Chinese listed companies'control right by the new method. Then the paper does normative and empirical analysis of the influencing factors of control right and the impact of control right on corporate performance.First, the paper improves the measurement of control right. Currently, there are two measurement methods about the control right, one is tracing the chain of control proposed by La Porta, Lopez-de-Silanes and Shleifer (1999),the sum of the minimum value of each layer 'stock right' ratio per control chain is the degree of control, the sum of the product of each layer 'stock right' ratio per control chain is the control right, the difference between the degree of control and control right is defined as separation of two rights. The other is probabilistic model of voting proposed by John Cubbin and Dennis Leech (1983), they defined the probability of actual controller winning the vote at the general meeting as the degree of control. Both methods have advantages and disadvantages, but the control itself is difficult to measure, it's an implicit index. In this paper, the author combines the two methods. First,finding out the actual controller's voting right and more Cash-Flash rights by tracing the chain of control, and then put the actual controller' right into the improved probabilistic model, finally we can have the control degree of the actual controller to the company. The combination of two methods make the calculation of control right more reasonable, precise and more realistic. Second, we use the public data to measure the index of listed companies'control right in China.Second, the paper examines the present situation of Chinese listed companies' control right, and studies the impact of influence factors of control degree and the actual controller's different nature on the characteristics of control right by using mathematical statistical methods. According to actual controller's nature we divide samples of listed companies into state-owned companies and private companies. The study found that there are significantly differences between state-owned companies and private company:the degree of control and the ratio of ownership of state control company are significantly higher than that of private company; the separation of two rights lower than that of private companies; most of the state-owned companies are directly control of, while the private companies use the indirectly control; private companies'relative control ratio is higher than that of the state-owned companies; the company's ownership structure, board structure, the actual controller's realization and so on will affect actual controller's control to the company. The more dispersed of the ownership structure, the higher degree of actual controller's control. But the independent directors can constraint and balance the actual controller. The different realization can influence the control degree of the actual controllers.Third, according to the existing research results, the paper assumes that the nature of the actual controller will affect the corporate performance through further investigation of the relationship between controller and corporate performance. If the company is state-owned, the corporate performance will worse than that of private company; the ratio of actual controller to company ownership and corporate performance are positive correlation, the greater the ratio, the better the corporate performance. Then using econometric tool and the data of Chinese listed companies, we test the hypothesis, the result shown that at this stage of Chinese listed companies'control right have impact on corporate performance at this stage. Finally, the paper explores the impact of the control right on corporate performance based on the empirical analysis, and puts forward some proposals about improving corporate governance, promoting long-term development and e normal operation of listed companies, protecting the interests of small and medium investors and regulating the securities market.