The Empirical Study On Equity Ownership Structure And Diversification Degree Of Chinese Listed Companies

When it comes to the research on the effects and efficiency of equity ownership structure (EOS) on corporate governance, there are mainly two research perspectives from foreign scholars, one is based on corporate performance, and the other is based on corporate decision-making behavior. In recent years, domestic scholars have made abundant effective research on this issue as well, with Chinese listed company data. But their research achievement chiefly based on the perspective of corporate performance, however, rarely on the perspective of corporate decision-making behavior.Meanwhile, corporate diversification has also been a controversial topic in academic world. Hitherto, there have mainly been two research stages internationally: The first stage is characteristic of focusing on whether corporate diversification destroys or creates corporate value, i.e., corporate Diversification Discount is actually true or not? And the second stage is characteristic of discussing corporate diversification motivation after academic world admits the truth of Diversification Discount.Presently, most research on corporate diversification is qualitative, quantitative study simply focuses on the relationship between corporate diversification and performance, but rarely on the relationship between diversification and equity ownership structure (EOS)which is a much more far-reaching influencing factor.In this paper, from the perspective of corporate decision-making behavior, linking EOS to diversification degree, making use of data from Chinese listed company, I test Agency Theory and discuss different effects and efficiency of EOS on corporate governance, with hope to enrich academic literature on corporate governance and provide some valuable support for governmental decision-making & regulation.This dissertation is divided into five chapters, and the main contents of each are as follows:Chapter one: Introduction. It presents the realistic & academic background of the author's research and puts forward research issue.Chapter two: Theory & Literature Review. First of all, It clarifies different effects of equity ownership concentration,insider-holding share and equity ownership identity structure. Then it summarizes the existing economic explanations on motivation of diversification in order to make full preparation for test of the explanative effectiveness of motivation theory on diversification in China's background. Finally, it reviews relational literature on corporate Diversification Discount and explanation of Agency Theory for Diversification Discount.Chapter three: The Status Quo and the Special Background of Diversification in China's listed companies. It first introduces the status quo and special background of diversification in China's listed companies, then analyses explanative effectiveness of above motivation theory on diversification in China's background and finally draw a conclusion that Agency Theory has highly explanative effectiveness on diversification in Chinese listed companies.Chapter four: Empirical Study on EOS and Diversification Degree of Chinese Listed Companies. It tests Agency Theory of diversification with data from Chinese listed companies, i.e. investigates the correlation between complex EOS in Chinese listed companies and diversification degree.Chapter five: Conclusion and Limitations of this dissertation.Through empirical study, this paper draws the conclusion as follows:There is significantly negative correlation between equity ownership concentration (including the share -holding ratio of the largest shareholder) and corporate diversification degree.The correlation between SHSR (State-owned Holding Share Ratio) and corporate diversification degree is negative, but not markedly.Corporate diversification degree is basically independent of LHSR (Law-owned Holding Share Ratio).The correlation between LIQAR (Liquid A-share Ratio) and corporate diversification degree is significantly positive.