Research On The Influences Of Split Share Structure Reform On Listed Companies Performance

There were several problems of Chinese listed companies before split share structure such as, the unreasonable equity structure, the control of state-owned shares and non-tradeable equities. These problems seriously affected the equity structure optimization and limited the effective growth of Chinese listed companies. And the healthy development of stock market was troubled. In April 2005, the Chinese Securities Supervisory Association announced that the pilot work, which intended to solve the split share structure question, officially started. The split share structure reform is the most significant reform in Chinese shares market since its establishment. Because it brings new impetus to improve the governance structure and the management of listed companies. It also provides new opportunities for the healthy and stable development for capital market. Till nowadays, the reform has already worked almost five years. Whether the corporate performance has been improved and the relation between the reform and the corporate performance both have provided the research subjects for this article.This article can be divided into six sections. The first section briefly introduces the research background, research ideas, research contents, research methods, and research innovations. In the second section, reviews on research literatures, which are about the influences of split share structure reform on corporate performance at home and abroad, is taken firstly. And it provides some ideas for the study of this article through analysis advantages and weaknesses of those literatures. The theoretical basis of this study, including the separation of ownership theory and the principal-agent theory, are also described in this part. In the third section, the detail background of split share structure reform of listed companies in China is described. It contains the concept of split share structure, the origin and defect of split share structure, the destination and the process of the split share structure reform. The fourth section has analysed how the reform impacts the performance of listed company theoretically. The split share structure reform changed the equity structures of listed companies. The corporate governance mechanism is a bridge between the equity structure and the corporate performance. The equity structure is foundation of corporate governance, meanwhile the efficiency of corporate governance will ultimately be reflected on the corporate performance. The main function of corporate governance is to improve efficiency and corporate performance through optimizing the structure, reducing costs and taking other measures. As the core of this article, section five takes empirical study on the influencing factors of split share structure reform on corporate performance of listed companies. This paper chooses companies from the first and second batch of trial companies as samples, choosing the five-years data from 2004 to 2008 and using statistical software in the multivariate linear regression method. The study finds that the split share structure reform improves the listed companies performance. Before the reform, the proportion of tradeable shares have negative correlation with corporate performance and the holding proportion of the first big shareholder does not have a significant impact on corporate performance. After the reform, the proportion of tradeable shares have positive correlation with corporate performance and the holding proportion of the first big shareholder have negative correlation with corporate performance. Taking advantage of empirical research findings, the sixth section puts forward related policy recommendations to improve corporate performance, combined with the status quo of Chinese listed companies.