An Empirical Study On Equity Division Reform And Corporate Governance Efficiency

The aims of Equity division reform are full circulation of the equity, changes of Equitydivision of stockholders equity structure, and the result from both of them, improvement ofcorporate governance level of on-list companines in China. The Equity Division Reform has justhad ended, so at present, there's little empirical study on how Equity Division Reform influencesthe efficiency of corporate governance. In this paper, we did research on stockholders equitystructure and corporate governance, verified the relationship between Equity Division Reformand corporate governance efficiency from empirical angle, and chose the corporates which hadfinished the reform in 2005 as referent. And because these Corporates had finished the reform formore than one year, they are now gradually removing the ban on limited-sales fluent shares, andeffects of the Equity Division Reform start to emerge. Simultaneously, we did regression tests tothe 86 valid samples, compared the regression result of the two Tobin's Q, and then found thatthe market value of stocks could be all capital stocks by share prices, and this could substitutethe way the Chinese experts calculated the market value of stocks previously, which equalsfluent shares multiplied by share prices and limited-sales multiplied by equity per share.After that, by comparing the regression results of 2004 and 2006,we find the newestcondition of stockholders equity and Corporate Governance: the increasing floating stockpromotes corporates' performance; The negotiability of majority stockholders has nearlynothing to do with the corporates' performance; Institutional investors can help to enhance thevalidity of Corporate Governance; the Governance structure that stockholders equityconcentrated relatively is propitious to the improvement of governance efficiency; also, we cometo the conclusion according to the former analysis that after the Equity division reform, largeshareholder governance tends to be rational.From the empirical result, we think that Equity Division Reform has an important effect onimproving corporate governance level. And for there are still problems after the reform, at theend of this article, some suggestions are proposed to make the corporate governance of Chineseon-list corporate perfect and welcome times of full circulation.