Empirical Research On The Impact Of China's Listed Companies, The Largest Shareholder, Related Party Transactions

Researches on corporate governance in recent years show that the corporate equities in most countries around the world especially in the emerging markets were not diversified but relatively concentrated. The concentrated equity could bring on another agent problem - the large stockholders expropriate the interests of minority stockholders. Aimed at this kind of expropriation problem, scholars mostly make indirect researches on the relation between equity frame and firm performance, surplus management, dividend policies and related-party transaction in order to directly open out the expropriation behavior and manner taken by large stockholders.This article chooses the related-party transactions in 2003-2004 as research objects, and analyzes the main objects and categories the related-party transactions happen, and does regression analysis further. This article tries to find how the related-party transactions affect the performance of listed companies and which related-party transactions the large stockholders often use to expropriate the benefit of minority stockholders, and find evidence of the agent problems between large stockholders and minority stockholders. The results show that: (1) the main objects the related-party transactions happen are the largest stockholders. The ownerships owned by the largest shareholders are positively correlated to the occurrences of the related-party transactions, but the ownerships owned by the largest shareholders are negatively correlated to the sum of the related-party transactions; (2) the related-party transactions such as products sales, equity cession, providing capital, exchanging assets damage the financial performance of listed companies but raise their market performance. The related-party transactions such as products purchases are negatively correlated to ROE evidently, but the negative correlation with Tobin Q is not very evidently;(3) as a whole, the related-party transactions between the listed companies and their largest stockholders directly damage the financial performance of listed companies;(4) further study shows that when the largest stockholder has less than 30% ownership, the related-party transactions of its largest stockholders damage the financial performance of the listed companies. But when the largest stockholders have more than 30% ownership, its total sum of the related-party transactions and ROE and Tobin Q have no evident correlativity.