An Empirical Study On The Relationship Between The Equity Structure And Corporate Performance Of Listed Companies

The shareholding structure decided the company owners and shareholders, thereby determined the Board, the composition of the board of supervisors and managers, and the general meeting of shareholders, board of directors, board of supervisors and managers are four main interest of the corporate governance structure. Therefore, the equity structure of corporate governance structure is the foundation of corporate governance and the main determining factor of it, and the different corporate governance structures also have a significant impact on enterprise performance. Therefore, the equity structure has a influence on firm performance through the corporate governance. There are many problems in China's listed companies from 1991 when Shanghai Stock Exchange and Shenzhen Stock Exchange started to the establishment of the equity division reform of the shares, such as a complex ownership structure, state-owned shares and legal person shares can't be in circulation, and highly concentrated ownership. How the relationship between the shareholding structure of the company and the firm performance; After Equity division reform is implemented, what changes have taken place of the ownership structure of China's listed companies and how about the performance of the company are the focus of this paper seeks to explore.Based on the analysis of domestic and foreign scholars about the topic, putting forward the assumptions of the relationship between the equity structure and the firm performance of China's listed companies, and then building the model, expected to explain the questions from the demonstration research. Based on the Shanghai Stock Exchange on December 31, 2005 deadline for implementation of the equity division reform of listed companies as the research target, choose the data of 2004 and 2006, adopt descriptive statistics and multivariate regression methods to study the listed companies. From 2004 descriptive statistics, there is a larger proportion of state-owned shares of listed companies in China, nearly 50% of the total equity, and the largest corporate shareholder is the state government, not in circulation. The proportion of shares in circulation is relatively low, less than 40% of its average. On average, the company's largest shareholders control 48% of the equity, and the top five shareholders control more than 60% of the shares. This shows that the equity division of listed companies in China before the reform of state shares exists the situation of "due to the dominance" and excessive concentration of ownership.Regression analysis of the 2004 data has come to the following conclusions: Performance negatively correlated with the proportion of state-owned shares. Along with the general increase in the company's shares tend to reduce performance. Management of state-owned shares in listed companies has not played a positive role, so reducing the proportion of state-owned shares in listed companies will help improve the operating results of listed companies. Performance is associated with the proportion of corporate shares, corporate shares and shareholders have greater control over national power and ability therefore is appropriate to continue to maintain a certain proportion of the corporate shares. Performance of shares in circulation and there is no significant relationship between them. The circulating share is still difficult to play an active role in governance. This is probably because our major and medium-sized retail investors are apt to seeking short-term post, and they are not interested in corporate governance in general, there are serious "free-rider" phenomenon. Ownership and corporate performance are related, as in a sample. The top five average shareholder equity ratio reached 63.03%, and the average major shareholder equity ratio as high as 48.8%. There is a huge disparity between the first major shareholders and the four largest shareholders. So the first major shareholders in listed companies to firmly grasp control of the company, and a major shareholder for the country shares. Thus reducing the proportion of shares held in the first major shareholders, increasing the proportion from the second largest shareholder to the fifth largest shareholding, change due to the dominance of the listed companies, moderating concentration of ownership pattern of performance is crucial to the improvement of China's listed companies.Descriptive statistics of the 2006 data has come to the following conclusions: the proportion of state-owned shares a shareholding structure declined significantly,up from 48% down to 23%, and a small proportion of the corporate shares change. A large proportion of shares in circulation increased, from 33% to 54%. The proportion of the first major shareholders and the top five largest shareholders equity ratio of shareholding ratio has declined, from 48.8% to 39%, dropped to 52% from 63%. Note change in the shareholder structure reform of China's listed companies "due to the dominance of" situation, excessive concentration of ownership concentration from turning into a moderate concentration of ownership structure is gradually more reasonable.Regression analysis of the 2006 data: Performance negatively correlated with the proportion of state-owned shares, but correlation was significantly less than the equity division reform, which shows along with the reducing of the proportion of state-owned shares the negative impact on corporate performance has come down. With state-owned shares can be expected from a restricted flow conditions into shares of Circulation, negative impact on the company's performance will become smaller and smaller. Therefore, the proportion of state-owned shares in listed companies to help reduce the operating results of listed companies to improve. Corporate performance is associated with the company shares, and this shows that with the listing of corporate shares in circulation in China, the corporate shares will play a active role in corporate governance. Tradable share and the company's performance showed no significant linear relationship, although the proportion of shares in circulation after the stock has risen significantly compared with the stock ago, but has yet to play a positive role in performance. This is probably because most of the shares in circulation at present China's small and medium-sized retail investors hands, Their main purpose is to seeking profit through short-term stock prices, rather than focus on the company's long-term development. Therefore, the cultivation of rational institutional investors will help improve the performance of China's listed companies. Ownership and corporate performance are related. Descriptive statistics data showed that Share Reform of China's listed companies are owned by the excessive concentration gradually to an appropriate concentration, which shows that appropriately focused on the ownership structure will play a positive role in promoting the performance.The demonstration results shows that along with the deepening reform of the equity division the state-owned shares gradually diminish, shares appropriately focused, corporate shares will play an increasingly active role in China's listed companies and the operating performance will be improved.