Ownership Concentration, Outside Blockholders And Firm Value

It is the core of modern enterprise system to establish a perfect corporate governance system which must be able to limit the right of the management, coordinate the benefits of stakeholders, especially large stakeholders and median-small stakeholders, strengthen the competitive capacity and raise firm valuation. Ownership structure is one of the most important branches of the corporate governance theoretical study which is concerned to whether and how different ownership distribution can influence the efficiency of corporate governance.In China, most listed companies stem from restructured state-owned enterprise, as a result, the share structure is highly concentrated by state-owned shares and not be circulated. Lack of owner and highly concentrated ownership structure in state-owned stock bring on two different types of agent problem: owners and managers, lager stockholders and median-small stockholders. How existent ownership structure impact on corporate value, and what ownership structure can maximize the corporate value. Based on the prior studies, this paper chooses the A-share listed companies as samples for the period through 2002 to 2004, classifies two different types of industry(protected industry and non-protected industry), determines firm value as the explained variables,takes ownership concentration and outside blockholders as the explaining variables to conduct an empirical research on the influences of them. The empirical results indicate that there is a significant positive relationship between ownership concentration and value of listed firm for protected industry. For non-protected, there is the not-significant reverse U-stlye relationship between ownership concentration and value of listed firm, significant positive relationship between percentage of second large-stakeholder and value of listed firm and significant reverse U-style relationship between ownership balance ratio and value of listed firm. The results also show that as for positive relationship between stock property and firm value, first is private property, second stated fictitious person shares, third stated owned shares. This paper includes five chapters.Chapter 1 introduces the background and meaning of study, aim and method of research. There is also the explanation on correlative concept。Chapter 2 is literature review. Foreign literature, at the point of view of two types of agent problem, does some theoretical and empirical research on relationship between ownership structure and corporate value. Domestic literature is empirical research based on theoretical research. The author summarizes both foreign and domestic academic literature in this field.Chapter 3 is research hypothesis and research design. According to foreign and domestic theoretical and empirical research, the author bring forward hypotheses on relationship between ownership concentration, ratio of outside blockholders and company value in different industries. And the end of the chapter, the author provides details on data and variables.Chapter 4 is empirical research. The author does some empirical research, including descriptive statistics, factor analyses, comparative analyses and regression analyses and finds research conclusion.Chapter 5 describes conclusion, advice, innovation and shortages of this paper.