Reform Of Non-tradable Shares And Its Influence On Corporate Governance And Corporate Performance

The phenomenon of non- tradable shares is a system that holds back China's capital market from developing healthily. May 5th, 2005, China Securities Regulatory Commission officially started the course of the reform of non-tradable shares. The goal of the reform of non-tradable shares is to achieve the circulation of all shares. However, it will take several years to reach this goal. Before its accomplishment, the shareholder structure of China's listed companies is complicated. This paper studies due to the reform of non-tradable shares, how the shareholder structure of China's listed companies changes and how it influences the corporate governance and corporate performance.This paper theoretically illustrates the inter-influence among shareholder structure, corporate governance and corporate performance. And then, this paper takes as sample the small and middle sized enterprises which had started the reform of non-tradable shares before the end of 2005, and makes the descriptive statistical analysis and the regression analysis. The results of empirical analysis show that the reform of non-tradable shares influences the shareholder structure of listed companies and therefore influences the corporate governance and corporate performance. This paper is just a historical phased study, which leaves much room for the follow-up.