The Effect Of Shareholder Property To The Large Shareholders Increase Ownership

The literature about the large share holder usually focus on the large shareholders violate the benefit of the small shareholder through tunneling behavior such as self-transaction.There is seldom paper investigate the large shareholder' transaction behavior in the second capital market in China.The Chinese ownership de-settlement transformation is going on and the unexchangable shares have been transformed into the exchangeable shares.Under the situation,investigating the transaction behavior of the large shareholder is possible and necessary.The large shareholders as the insider of the firms arethought to possess superior information than the outside shareholder.They could earn abnormal return with their superior information.However,Chinese listed firms have been mainly controlled by the government ownership.Government is the direct or indirect shareholder of more than half listed firms.The government ownership is different from the private ownership by its economics property and it should perform different from the private ownership.This paper investigates the different transaction behavior of different kinds of large shareholder under the situation that government encourage the shareholders of the state-own-entrepreneur to increase the ownership.The market reacts more strongly to the announcement of the government ownership than the announcement of the private ownership in short run.But,in the long time horizon, the cumulative abnormal return of the government ownership is negative while the private ownership is positive.The result illustrate that the government ownership could stabilize the market sentiment in short run.And the increase ownership of the government shareholder is not due to the economic target but the political goal. Moreover,the agent length of the legal person shareholder and the state shareholder is different from each other.The actual controllers to the State-Own-Entrepreneurs are vary in these two kinds of government ownership.It could lead to different behaviors.The domestic literatures have investigated the effect of the legal person shareholder and the state shareholder to the performance of the State-Own-Entrepreneurs.The results in this paper are half consistent with the hypothesis.In short-run,the legal person shareholder announcement of increase ownership has larger market reaction than that announcement of the state shareholder. But in long run the situation is reversal.