Listed Companies The Largest Shareholder After The Transfer Of Control Of The Transfer Of Benefits

In recent years, many studies have found that concentrated equity is normal in corporation ownership structure, which challenges the traditional basic propositions of corporate governance based on equity dispersion. When corporate equity changes from centralization to dispersion, the main agency problem would evolve to the conflict between large stockholders and small shareholders. Many scholars have studied on control right transfer event, the comparative uniform viewpoint is that control right transfer could be an important mechanism that conquer the agency problem arising from managers and hence improves corporate governance. However, this viewpoint is still based on the classical hypothesis of equity dispersion. Under the centralized equity structure, whether the motivation effects control right transfer and factors affect performance are different from the traditional agency hypothesis or not, is the main problem this paper intends to resolve.On the basis of studies on related literatures about large stockholders and control right transfer, this paper constructs generalized related party transactions, including related purchases and sales, related restructuring, funds occupation and related guarantee , and ultra-ability dividend payout as proxy variables of tunneling and propping. After collected 227 listed companies whose control right transfered from 1999 to 2003, this paper conducted empirical tests on the relationship between big stockholders' tunneling and propping behaviour and the long-term performance of listed companies after control right transfer. Firstly, through descriptive statistical analysis on proxy variables of sample companies between the time windows of 5 years from 1year before to 3years after control right transfer, behaviors of listed companies would be discussed. Secondly, through variance analysis and multiple regression analysis, it also would be researched that the relationship between the tunneling and propping behaviour and the long-term performance of the company. Finally, this paper would study the relationship between tunneling and propping behaviour and internal and external corporation governance mechanisms through Logistic regression analysis.The main results are as follows: (1) This paper found that because of omission of internal corporate governance and defects of external laws, rules and regulations, large stockholders tunneling and propping behaviour in listed companies after control right transfer is universal. (2)Large stockholders' tunneling and propping behaviour is one of the important reasons of listed companies' performance downslide. (3)Operational related party transcation is one of propping behaviour of large stockholders, while nonoperational related party transcation, including related restructuring, occupation of funds of listed companies and guarantee for related parties and high dividends payout are tunneling behaviours of larger shareholders. (4) Other large shareholdes could not supervise and restrict the tunneling behavior of the largest shareholder. Otherwise, the conspiracy phenomenon would be occurced. (5) State-owned controlling shareholders have stronger tunneling motivation, while nonstate-owned controlling shareholders have stronger motivation to do "propping" transfer. (6)Marketlization process and the increase in investor protection level can decrease the possibility of big stockholders tunneling and propping behaviours significantly, which means that timely and effective disclosure of information, the development of market and legal protection for small stockholders have rather good effects on corporate governance and the tunneling and propping behavior of big stockholders.