A Study On The Performance Of The Non-Tradable Share Reform Of State-Controlled Listed Companies

The main purpose of this thesis is to analyze the process of the reform of the non-tradable shares of state-controlled listed companies from the view of the property rights theory and the theory about cost evaluation of institutional transformation. The cost of the transformation of stated-owned enterprise, and the influence of the ownership structure on the corporate governance structure and the business performance were analyzed.With a focus on Jiangsu province and through the comparison of Jiangsu and Guangdong province, this paper identifies the different strategies chosen by local State Assets Administration Committees during the process of institutional transformation. The present research mainly uses the data of the companies from Jiangsu and Guangdong province publicly listed on the Shenzhen and Shanghai stock exchanges before 2004, and applies the mathematical methods including descriptive statistical analysis, case analysis and regression analysis. This article establishes fundes that the consideration mechanism is effective to achieve institutional transformation, and the ratio of non-tradable shares is related to the consideration level. The analysis proves that the consideration level increases with the ratio of non-tradable shares in the state-owned listed companies in Jiangsu province. The reform of non-tradable shares effectively improves the property structure of the publicly listed companies, especially the first majority shareholders'shareholding ratio and the ownership concentration. The shareholding ratio of state shareholders fell to 10% in average after the reform of the non-tradable shares of state-controlled listed companies. But then they hardly have any intention to actively reduce their shares, which is possible related to the fear of State Assets Administration Committees to lose the power of exercising control. The state-controlled listed companies in Jiangsu province went through a more regulative reform of non-tradable shares and obtained better protection of state-owned assets compared to the ones in Guangdong province, although it an abnormal phenomena of share increase in general competitive areas occurred. The research also illustrates that the improvement of property structure have a positive impact on administration structure and business performance.Through the analysis of the consideration model, the share reform and ownership structure change model, this paper demonstrates that in the institutional transformation cost evaluation process, there actually exist seven environment variables. Therefore, from the view of institutional economics and econometrics, we can prove that the reform of non-tradable shares of Jiangsu's state-controlled listed companies can generally considered as a success. Finally, the paper provides some suggestions for further institutional reform of the state assets management based on the research conclusion.