Study On Pyramidal Sharehoulding Stucture In Chinese Private Listed Companies

As the private sector of China develops rapidly, more and more private enterprises successfully come into security market. After examining the ultimate ownership structure of Chinese private listed companies, the paper finds that the pyramidal shareholding structure is prevalent in Chinese security market. Along with some scandals of private listed company clusters are reported recently, more and more scholars pay attention to the pyramidal shareholding structure and investigate it.In the first place, the paper systemically reviews the foreign and domestic researches on pyramidal shareholding structure. The paper introduces the empirical evidence of the pyramidal shareholding structure, the emerging condition of the pyramidal shareholding structure and the influence of the pyramidal shareholding.In the second place, the paper describes the present conditions and the distributing characteristics of the pyramidal shareholding structure in Chinese private listed companies. Based on the forgoing theoretical analysis, the research hypotheses are put forward. In the empirical section, the paper researches the impact of separation between cash-flow right and control right on firm value, and the relationship between the ratio of cash-flow right over control right and the particular characteristics of the firm, using the empirical data of Chinese private listed companies in 2005.The results of the empirical analysis indicate that the pyramidal shareholding structure is very common in Chinese private listed companies. Compared with other type of listed companies, the separation between cash-flow right and the control right is stronger in the private listed companies. Taking the pyramidal company into account, the paper finds that the firm value increases with the cash-flow right of the ultimate owner, consistent with a positive incentive effect.At the end, suggestions on how to regulate the pyramidal private listed companies and protect the minority shareholders' rights are proposed, according to the empirical results. The paper also notes the limit of the research and the research prospect of the future.