The Ownership Structure And The Corporate Performance

China has been achieving great economic success for more than twenty years. It has created lots of markets, including a stock market. Although these markets are imperfect, they have formed a foundation, on which the state-owned enterprises could reform further. Both government officers and enterprise operators realize that it is very important for the performance of the enterprises to establish a modern enterprise system, especially to clarify property rights. 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, strengthen the competitive capacity and raise firm's performance. 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.It is common for state owned companies being listing through remolding with the stock system that state shares and artificial person shares hold all the trumps in the overall shares of companies. In recent years, with the increase of private listed companies the phenomenon that initiators of private listed companies hold the most shares of the companies has become more and more prominent. Therefore, it is prevalent that big shareholders infringe upon the benefits of small shareholders. To study the influence of ownership concentration on the efficiency of corporate governance is especially more important than other problems in the field of ownership structure studies and has been an hot point of ownership theoretical study.Based on the review of related literature, it takes the research theoretically between the equity structure and corporate performance of listed companies, carry on the equity structure, corporate governance and agent theory as the theory foundation. In this thesis, it takes the fraction of shares owned by the largest shareholder,the three largest shareholdings and the five largest shareholdings as the indexes to scale the Ownership Concentration. It takes the relationship between the Ownership Concentration and corporate performance of listed companies as to correspond the point, carry on the research further, to find the relationship between the corporate performance and the fraction of shares owned by the largest shareholder,the three largest shareholdings and the five largest shareholdings. Based on the prior studies, the Chinese commerce enterprises in Shanghai and Shenzhen Stock Exchanges in year 2005 and 2006 being used as sample, empirical researches on the relationship between ownership concentration and a company s performance are done, the relations between the two are examined, and proposals on improving ownership concentration are explored. The data of annual report that the listed companies announced are the main source of data that this thesis carries on the empirical research.The empirical results indicate that the ownership concentration has effect on corporate performance. The fraction of shares owned by the largest shareholder,the five three shareholdings and the five largest shareholdings has faint inverse U relation to corporate performance.