Impact Of Ownership Structure On Corporate Performance

Since the reform and open, family business developed fast and become the leading factor in our national economy. With the development of family business, more and more family firms go to public and attract many scholars. From the family workshop to the normalized listed company with modern business system, family firms face all kinds of challenges. When going to public becomes the effective measure to raising money, study on the shareholding structure of family listed company in our country is very significant.This article chooses the family listed companies in Shanghai and Shenzhen stock exchange between the year 2003 and 2005 as the sample to study the relationship between shareholding structure and performance from two respects: ownership concentration and outside block holder. The studies before mainly chose sole accounting index or Tobin's Q, which have their intrinsic defects, to measure corporation performance. However, using Factor Analysis, we consider 20 indexes of earning ability, operating ability and repaying ability to get a comprehensive operating performance. At the same time, we choose the first shareholder's percentage of stocks, the first five shareholder's percentage, the first ten shareholder's percentage and Herfindahl index to measure the degree of ownership concentration. In the respect of outside block holder, we observe other shareholders' monitoring to the first shareholder and Z index. Based on compare means and regression analysis, this article get conclusions as follows: family mainly control the ownership in the family listed company of our country, other shareholders can't restrict the first shareholder effectively; the relationship between ownership concentration and comprehensive operating performance is upside-down U; there is a negative relationship between outside block holder and comprehensive operating performance, but the result is not significant in statistics. Based on the conclusions, this article advise: ensure that outside blockholder can restrict controlling shareholder by making strict rules and regulations; open the ownership to encourage managers and reduce agency costs; arrange ownership structure according to its' own development states to get the most utility;make rules to protect small shareholders.