An Comparative Research Of The Relationship Between Concentration Ratio Of Shares And Business Performance Of State-owned & Privately-owned Listed Companies In Medicine Industry

Concentration ratio of shares is the most important elements of corporate governance. The relationship among concentration ratio of shares, corporate governance and business performance is the most significant subjects in the management research area. Through its effect on the corporate governance structure, concentration ratio of shares influences the strategy selections, management philosophy and resource relocation and finally, the business performance.Chinese state-owned listed companies are restructured more from state-owned enterprise, the biggest shareholder is country share or state-owned institutional share, it has high concentration equity; The entrepreneurs of privately-owned listed companies are basically family as the unit, its control over the hands of a family member of the association represented by shareholders, it has moderate concentration equity. The different course of development caused different ownership structure between the two types of listed companies, so it's obviously unreasonable to apply the conclusions which studied of all listed companies to the privately-owned listed companies.In this paper, I choose 33 state-owned listed companies and 25 privately-owned listed companies about Medicine Industry in Shanghai and Shenzhen Stock Exchanges as sample, used SPSS 16.0 software to make an empirical comparative research on the relationship between the concentration ratio of shares and the business performance. The relations between the two are examined, and proposals on improving ownership structure are explored. The research used data from 2005 to 2007. The data of annual report that the listed companies announced are the main source of data that this paper carries on the research.This study can be divided into five parts:The first part is the introduction pan. This part has outlined the paper research significance and the purpose, the article writing mentality, the framework of paper and the innovation points. The second part has introduced the domestic and foreign documents summary about the concentration ratio of shares and the business performance research. The third part analyses the theoretical on ownership structure and business performance in listed companies. The fourth part is the empirical analysis part, using descriptive analysis, correlation analysis and regression analysis method to examine the research hypothesis. The fifth part is the discussion of the research conclusion from the comprehensive angle, making relevant suggestions and the further study about this paper.The empirical results shows, there is a certain difference in state-owned listed companies and privately-owned listed companies between the concentration ratio of shares and the business performance. In state-owned listed companies, when the biggest shareholder has the share more than 50%, it has a significant negative influence on the performance; when the biggest shareholder has the share between 10% and 50%, it has no significant influence on the performance. In privately-owned companies, the biggest shareholder's ownership percentage has no significant influence on the performance. The proportion of non-controlling shareholders of the two listed companies also has a significant positive influence on the performance. Furthermore, the equity restriction ratio of privately-owned listed companies is higher than state-owned listed companies.