Study On Wealth Effect Of Listed Company's Largest Shareholder Alteration

The company domination theory is one the most important subjects in economics and company financial theory field and is also a argumentative focus question in academe. During the period of reforming and opening, with the development of economy and the impetus of national polices, domination transference has become the major action of ameliorating outstanding achievements in listed companies in our country. After our country entered WTO, the capital market is gradually opening to the outside world, which is bound to enhance to transference of domination of listed companies in our country. Especially after the Non-tradable shares reform,shares complete liquidity brings listed companies some new problems, while company domination transference will be the most effective way to resolve the problems of larger shareholder. My paper select the listed companies,in which the larger shareholder have altered in the first half of 2005 to 2007, useing Event Study Methodology to study the wealth effect brought by larger shareholder alteration to the listed companies and classifying general samples in accordance with the altering of the chairmen of the boards and CEO or not, the means of shares right transference, the shifting of attributes of the larger shareholder alteration, the proportion of share right transference and trade to study the different classify to bring the wealth effect of company larger shareholder alteration. And through the establishment of multi-factor regression model to study the factors which impact the wealth effect of company's largest shareholder transfer.It concluded that the shareholders of the companies in which chairman of the board or CEO has altered can gain higher wealth, the same to the companies of State-owned shares being transferd without compensation company and State-owned shares becoming to in corporate shares and the companies in which the proportion of share transference is over 50% and manufacturing industries. Finally combing with the special background of our country's capital market, for supervisory organs better regulating and controlling the action of share transference of domination market, the author put forward some recommendations such as establishing the fair deal takeover systems, sounding domination market of China,perfecting companies' management structure,improving companys' appointment and removal mechanism of board of directors,choosing a more effective control of the transfer,strengthening the equity market process,standardizing the equity transfer ratio and pricing mechanisms in share controlling transfer market.Thus making share controlling transfer become to the genuine optimization means of allocating resources.