Research On Determinants Of Private Benefits Of Control

With the deeper research on corporate governance,confilicts between larger shareholders and smaller shareholders have been replaced by management and shareholders, and has become the focus of the corporate governance study. "Private Benefits of Control"(PBC) is the core of conflicts between major shareholder and medium-sized shareholders.There are many ways that larger shareholders exploit minor shareholders in listed companies, including the tunneling acts, issuing shares diluted. Behaviors of these realities have violated investors seriously, and have affected the healthy development of China's securities market.After the external and internal causes that larger shareholders exploit medium-sized shareholders are explained, the article conducted an empirical analysis. After analyzing the domestic and international measures on private benefits of control, the article selected a method that can measure private benefits of control in our country. The article selected 184 companies that control right is thansferred between 2001 and 2006, and the average private benefits of control is 5.6%. Taking into account the special ownership of our country, we studied 184 samples separately by the nature of the company which controlling shareholder is state-owned or non-state-owned. The analysis found:At the company level, the PBC is negative correlation with ROE and propotion of the common stock, but is positive with degree of equity equivalence, The effectiveness of the debt and firm size to state-owned companies is signifcant on corporate governance; At the industry level, lower degree of monopoly means lower PBC, higher fixed assets means lower PBC; At system level, the promotion of law can restrain PBC.Finally, the author put forward relevant policy recommendations, including the improvement of independent direct system and overall market system, to take effect of the role played by institutional investors, to strengthen control over the transfer of secrtor-spcific regulations, and finally, to improve the level of the law.