An Empirical Research On Product Market Competition And Large Shareholders' Expropriation

In the case of ownership concentration, shareholders can supervise managers more effectively, but it caused the phenomenon that large shareholder expropriating the assets of listed companies is emerging constantly. The expropriation of large shareholder not only harms the interests of middle-and-small shareholders, but also affects the development of listed companies, so, now the urgent problem which should be solved is how to curb such behavior and protect the benefits of minority shareholders.Many scholars have studied the agent problem between large shareholders and minority shareholders. However, most existing study is from the perspective of the internal governance mechanism, but less is from the perspective of the exterior governance mechanism. Product market competition is the indispensable part of exterior governance mechanism, many studies have shown the product market competition can improve the agent problem between shareholders and managers. Then, whether product market competition can improve the agent problem between large shareholders and middle-and-small shareholders? This is the core content of the paper.This paper adopts A-stock listed companies in Shanghai and Shenzhen stock market as samples, collecting there relevant data from 2007 to 2009 to study the large shareholders'expropriation, and mainly from the perspective of product market competition. In view of the defect of the single indicator, this paper uses two indicators to measure the intensity of product market competition, taking into account the proportion and the nature of large shareholders at the same time. Through the research we can get the following conclusions: Product market competition can affect the large shareholders'expropriation, the lower degree of competition, the more expropriation; in the highly competitive industry, product market competition can play more effectively. On the basis of the front plentiful research, suggestions of reducing expropriation by promoting effective competition are proposed in the paper.