Shareholding Structure And Corporate Performance Of Empirical Research

The relationship between ownership structure and corporation performance is always one of the hottest topics home and abroad. Theoretically, ownership structure determines how to dispose corporation ownership and residual control rights, which affect corporation performance and benefit of every shareholder. However, there are not consistent conclusions to the study on ownership structure and corporate performance empirically, no matter at home or abroad. Based on the deeply study on formerly domestic and overseas research fruits and particular traits of ownership structure in china listed firms, this thesis conducted a research and analysis on relationship between ownership structure and corporate performance in china listed firms, aiming to explore their relationship.Selecting 548 listed firms in shanghai stock market, by virtues of formerly research fruits and data of the 548 firms in 2005 and 2006, this thesis did an empirical analysis on the relationship between ownership structure and corporate performance in china listed companies, in order to make clear how different ownership proportion and shareholder pattern influence corporation performance. The main business profit margins, return on total assets, return of common equity and concentration of ownership are interpreted as the variables; the proportions of state—owned shares, corporate shares, public shares and the fraction of the shares owned by the five largest shareholders are interpreted as the explanatory variables; virtual variables to the industry, the size of the companies, the financial lever, the speed on companies' turning over, the increasing rate of net profit are interpreted as control variables. Descriptive statistics, correlation and regression analysis are use as method in the paper.Empirical result indicated that, firstly, the vacancy of the effective state-owned shareholders have probably leaded to serious internal control problems. Manager may use his authority to embezzle the interests of shareholders, therefore, the ratio of state—owned shares is negative correlated with corporate performance. Secondly, corporate shareholders have sufficient incentive and the ability to monitor the management personnel, the ratio of corporate shares has "cubic curves" relation to corporate performance. As a result, we should increase the ratio of corporate shares and construct the ownership in which corporate shareholders have relatively control shares. These measures will be propitious to the improvement of corporate performance. Thirdly, the dispersion of the public shareholders leads to its inefficiency in the governance, the ratio of public shares is negative correlated with corporate performance. This may be evidence for the strong speculation in china stock market and it also shows that we do not need extremely dispersive shareholding structure at this stage. Finally, the concentration of ownership has "inverse U" relation with corporate performance. The result shows us that moderate concentration of ownership will makes for maximizing the efficiency of corporate governance. Although we are not able to investigate the details on how the fraction of the shares owned by the five largest shareholders distribute, we consider that the ownership structure are the best when there are relatively controlled shareholders and other large shareholders in the structure of corporate governance. The relationship between ownership structure and corporate performance accords with the hypothesis which has been put forward in the paper considering the share-trading reform. However, the negative correlation between state-owned shares and corporate performance declined. The influence of corporate shares and the concentration of ownership on corporate performance ascend compared with the condition when the share-trading reform has not been implemented. Although the public shares has ascend after the share-trading reform, it has not make positive influence on corporate performance.Based on these conclusions, we have some policy recommendations. We also point out the shortages of this paper to be deeply researched in other papers.