China's Listed Companies Ownership Structure And Corporate Performance

Recently, the ownership structure is a hot research field in the corporate governance structure. Because it is related to different shareholders' interests and value of the company. The interests of the shareholders will have a direct impact on their behavior in the corporate governance. The ownership structure is the foundation of companies' control right and claim to residue, the start of corporate governance. So, it is always a hot field in the study of the corporate governance structure.Based on the equity concentration ratio, this paper launches the following research mainly:1. Based on the analysis of our country's current shareholding structure, this paper does a simple comment on the equity structure compared to international equity structure.2. Analyzes that how the ownership structure impact on the corporate performance.3. Does a empirical study on that how the ownership structure impact on the corporate performance in Chinese listed company.Though above-mentioned research, this paper forms the following conclusions:1. Based on the analysis of current situation. China has a relatively high equity concentration ratio. From 1998 to 2005. the first major shareholder has an equity concentration ratio more than 40 %. The ownership structure is becoming more and more concentrating.2. The 'dominance by the lion's share' impacts the improving of the corporate performance. There has a phenomenon named 'the controlling shareholder malfunction' in general listed companies which exists holding shareholder.3. Relatively increasing the small shareholder and outside blockholders is beneficial to improve the corporate performance. In China, the investors are not full protected, so it is a better choice to concentrate the equity in the hands of a few shareholders. This will reduce agency costs between shareholders and managers. On the other hand, the controlling shareholder will enhance the self-restraint, reduce the interests plunder to small shareholders and improve enterprise value.4. An appropriate disparity between controlling shareholder and small shareholders will have a positive effect on corporate performance.Based on the above conclusions, the following countermeasures and suggestions are proposed:1. Implementing a relatively equity holding pattern which can lighten the infraction to small investors. On the other hand, the companies' control right is going to be specific. Relatively controlling shareholders have the motivity and ability to solve the problems.2. Reduce the state-owned shares properly. The phenomenon of 'dominance by the lion's share' has had a serious impact on the corporate performance. So, to introduce new shareholders with good operating skills can significantly improve the corporate performance.3. Change the arrangement of the corporate ownership, so that the claim to residue and the corresponding control right can combine properly. Our state-owned listed companies' biggest shortcoming is the residual rights of state-owned shareholder are not matched with the control rights. Therefore, it is good to attract new investors and encourage managerial ownership.4. Establish and improve the supervision and incentive system for agents. The separation of ownership and control made the managers do things obey the shareholders interests. So, the shareholders need to put in some time, energy and money to supervise and encourage managers. Thus, the managers have the feasibility to do their best to maximize the shareholder's wealth.5. Establish a sound legal system to protect the interests of small shareholders. In the practice, the market has developed a system controlling big shareholders and protecting small investors. But, lots of research and facts show that most effective method is the protecting from the law. So, it is urgently necessary to speed up legislation, improve the legal system and standardize the information disclosure of listed companies.