An Empirical Study Of The Impact Of The First Two Shareholders,ownership Characteristics On Firm Value

The Equity of the listed company is very concentrated in China. The first -largest shareholder tends to use their control of the listed company to hollowed out it and the other shareholders are difficult to supervise it. We think that if the company has a influential second-largest shareholder, it may make such agency costs have abated. Therefore, this article would like to use theoretical analysis and empirical research to explore how the second-largest shareholder affects the firm value.Most previous studies are divided the nature of the majority shareholder into state-owned shares, legal person shares and tradable shares. This article accords with La Porta et al (1999) who proposed the principle of ultimate ownership, and draws on Liu Shao-jia et al (2003) and Xu Li-ping, et al (2006) on the nature of the shareholder. According to the actual exercise of the ownership of a listed company, the principal shareholders are divided into seven categories. There are the state-owned assets management agencies, state-owned enterprises directly under the central and local state-owned enterprises, private property rights, foreign companies, financial institutions, as well as universities. Since there are only about 4% of the latter three kinds of holding in all the companies, we only research on the companies of the former four types of controlling shareholders in this study.On the basis of the nature of the former two shareholders clearly defined, we research their influence on the value of the companies. In this paper, we base on the oretical assumptions and select all listed companies which only issued A shares in 2004 and 2007 for the study sample. We also use mean comparisons and non-parametric test of their empirical studies.Empirical results show that: it's not that the second largest shareholder much more supervises the first major shareholders, the higher value of the company will be. But the importance is that there are two major shareholders existing in the company who are strength of considerable, and they are not as "due to the dominance". When the different nature of the second-largest shareholder under the control of the different nature of the first-largest shareholders of listed companies, their performance will be distinctly different. Share-trading reform makes the performance of the company significantly improved.