The Motivation And Impact Of Cross-shareholdings Between Our Listed Companies

Cross-shareholding was originated in Japan first,its purpose was to resist hostile takeover and strengthen the links between enterprises and banks.As a mean of capital operation,cross-shareholding has been widely used in foreign countries,but it is still in the early stage of development in China.Its original purpose was to improve corporate governance and salve the state-owned shares "dominance" issues.After a series of events such as the Asian financial crisis,the Japanese economic bubble burst,the share reform and the introduction of new accounting standards,the phenomenon of cross-shareholding was valued by more and more domestic scholars.But in view of a late start,daomestic researches of cross-shareholding is still based on introduction and theoretical analysis,few empirical studies also.With the increasing development of cross-shareholdings in China,simple means of normative research is no longer applied,based on our actual conditions,it is becoming more necessary to make value judgments for the pros and cons of development of cross-shareholdings.After collecting and collating the data of cross-shareholding between listed companies in China,we want to examine the development of cross-shareholding in China with the empirical research method.This paper studies the main features of cross-shareholding companies,basises the probable motivation and analyze the inpacts.Through the test of cross-shareholding data,we finally gives the conclusion,there's no correlation between cross-shareholding and the profitability of main business,but in some extent it inhibits the profitability of main business,but subject to the constraints of small size,the effect in not significant.The effects to overall performance of companies mainly based on the stock market.In good enviroment they promote each other,but drag each other in bad enviroment.It can be said that cross-shareholdings of listed companies in China in not the same as foreign's which improve the prfitability of main business through long-term and stability cross-shareholding butfor the short-term investment income.