The Analysis Of The First Major Shareholder's Influence On The Listed Companies' Operating Performance

At the beginning of the establishment of China's securities market, The Purpose of highlighting the dominant position of public ownership resulted in split shares of listed companies, and the ratio of the first shareholder's share especially the state-controlled shareholders'ratio is too high. Although the first major shareholder in a holding status can play a positive role on effective supervision on the managers, which is benefit to improve the performance of the company. too high proportion of shareholding will lead to a serious imbalance in shares and expropriate the interests of minority shareholders,which leads to a negative effect on the performance of the company. As a result of the long agent chain , The state-owned company have a serious problem of internal control, even can't play a good supervisory role, the expropriation of the interests of minority shareholders are more serious. To solve this problem, in May 2005, our country implemented the reform of split Share structure.The core of this reform is to solve the reduction of non-tradable shares, transfer and circulation and fundamentally change this phenomenon, so that leading to the convergence of the interests of shareholders of listed companies,improve the performance of the company and lay a good foundation on the healthy development of China's capital market. The paper analyzes and evaluate, before this reform and after, if the change of the first major shareholder equity ratio and the nature of shareholding significantly improved the operating performance of listed companies in China, explores how to balance the positive and negative effects of large shareholders to improve the operating performance and make recommendations.In the theoretical analysis, the first, the paper conclude the study of domestic and foreign literature,the related concepts, and the theoretical basis,then analyze the largest shareholder equity ratio and the nature of its'effect on the corporate performance. At the same time, combined with China's specific national conditions, the paper conclude the evolution of China's enterprises and the characteristics of it before the reform,the process and the measures of this reform for the empirical studies carried out for the paper, put forward practical and realistic conclusions and recommendations. Part of empirical analysis, based on of the data of 669 listed companies (completing the reform in 2006) in 2001-2007,choose the return on assets for the business performance indicators. The paper explore the first shareholding ratio,the pattern of holding share,the extent of differences in shares and the balances and the nature of shares'influence on the performance before the reform and after,by the method of descriptive statistics and multiple linear regression analysis,then validate assumption and come to the conclusion. After the Reform, the first major shareholders holding a significant reduction in the proportion of listed companies to the pattern of relative holding shares, the positive effect and the negative effects of the company's largest shareholders reach a better balance, the performance of the company improve; in the nature of the shares, the proportion of non-state-owned shareholding's relative increase in the state-owned holding company, improve the performance. The reform achieves the expected results in improving the ownership structure of and the performance of listed companies.Finally, combining the research findings and make some recommendations:First, maintain an appropriate concentration of ownership of listed companies, promote the further transformation of the shareholder structure to the relative holding pattern and enhance the extent of balances in shares; Second, continue to promote the further transformation of the state-owned holding company to the non-state-owned holding company, increase the proportion of non-state-owned cormpanies' shares in the company which must maintain the state-owned holding status because of relating to the national economy.