Researches For Chinese Listed Companies On The Relationship Between Ownership Concentration And Firm Performance

Chinese listed companies usually have high ownership concerntration.It induces large shareholder who is in control have strong inspiration to harm minority shareholder.Based on the protection of minority shareholder, some chinese scholars suppose that sharing of control can restrict unwise investment by large shareholder and should be introduced to listed companies. As far as chinese listed companies are concerned, Weather high ownership concentration limits the function of corporate governance or not? Weather sharing of control should be introduced to companies or not? This study will attempt to make an empirical study and academic discussions.Based on the ownership concentration of Chinese listed companies, this paper indicates the relationship between ownership concentration and firm performance. Firstly, the thesis provides a review of the literatures on theories system and empirical study of the relationship between ownership concentration and firm performance. And then compare the investment decision under different ownership concentration. ON the one hand, sharing of control may prevent the inefficient project that a single controlling shareholder would undertake and protect minority shareholder. On the other hand, sharing of control may block efficient investment decision and promote agency cost. At last, it makes a mode to test the relationship between ownership concentration and firm performance. Although sharing of control weakens the inspiration to harm minority shareholder, high ownership concentration has stronger good effect on the firm performance for monitoring managers and lowering transaction cost. As a result, there is a positive relationship between them, the higher the ownership concentration is, the more profits the firm has.