Analysis Of Correlation Between Ownership Concentration, Outside Stockholders And Firm Performance

The firm internal governance mechanism can't be perfect because of the ownership structure of"One share dominates exclusively"for a long time. The restraint function of equity division to stock market begin to emerge. The stock market lose the function to improve firm governance efficiency. The reform of equity division begins at 2005,state-owned shares and corporate shares realize to circulate step by step; floating stock and un-floating stock will realize to"the same stock the same right"and"the same stock the same price". But the problem still to be stand out, the state-shareholder have absolutely control right in the board of directors, the phenomenon of"One share dominates exclusively"is still existed. The degree of"One share dominates exclusively"is different in the different industry, and is also to be different to the firm performance. Otherwise, the improvement of outside stockholders means the supervision function of outside stockholders to the first stockholder is more obvious.The retail trade is one of the fierce competition industry in china. It's manage quality is not only effect it's production and development, but also directly effect the people's benefit and social stability. The foreign capital aggravates the competition of retail market, the domestic enterprises faced a new stage shuffle and subsist pressure, the economic benefits have been descend. The reason is that from the reform and opening-up policy, the retail trade is in defect of unified planning, over competition is serious, it restricts the internal reform, and the ownership structure is one of the key factor to set off the firm impetus. The reasonable ownership structure is important to impel the strong stockholders and supervise the managers.The quoted companies are the representative of retail trade, how about the"One share dominates exclusively"of the retail quoted companies; is there existed correlation between ownership concentration,outside stockholders and firm performance; what kind of equity controlled stockholders; will the correlation be changed in the different equity controlled stockholders. While this thesis analyses these issues, it will offer reference to optimize the ownership structure of retail quoted companies. And the final aim is to improve the firm performance.The thesis selected the ownership structure and manage data of retail quoted companies between 2006 and 2008. It will use these data to demonstrate the correlation between ownership concentration,outside stockholders and firm performance. We find there are two kind of equity controlled stockholders—local SASAC and the private stockholders. In the condition of the whole retail quoted companies are be the samples, it is notably positive correlation between ownership concentration and firm performance; also this relation is existed between outside stockholders and firm performance. This means the ownership concentration and outside stockholders of retail quoted companies will positively effect performance. In the condition of the local SASAC control quoted companies are be the samples, it is notably positive correlation between ownership concentration and firm performance; also this relation is existed between outside stockholders and firm performance. This means the ownership concentration and outside stockholders of retail quoted companies will positively effect performance. In the condition of the private control quoted companies are be the samples, there is a new research found——it is convert U correlation between ownership concentration and firm performance; it indicates when the first stockholders shareholding proportionality is less than 36.8%, the improvement of ownership concentration is propitious to increase of firm performance; when the first stockholders shareholding proportionality is more than 36.8%, the improvement of ownership concentration restrain the increase of firm performance. It is notably negative correlation between the outside stockholders and firm performance, it means the improvement of outside stockholders proportionality will restrain the increase firm performance.