Research On The Influecne Of Large Shareholders Control On Firm Performance

Shares of listed companies in China are generally concentrated. Large shareholder control has become a common practice state of enterprises' ownership. How large shareholders affect the company's performance becomes the research focus of corporate governance. There are two theoretical explanations about this problem: agency theory and control theory. According to agency theory, the largest shareholder has motivation and ability to monitor the management of the operators, which can educe agency problems between shareholders and managers and improve firm performance. When block holders can not constrain controlling shareholder, large shareholder may occupy the interests of minority shareholders by tunneling behavior and reduce firm performance. According to control theory, the company's residual claims owned by all shareholders, while the residual rights of control by large shareholders control. When the large shareholders pursue the return over control owned all shareholders will improve firm performance. When the large shareholders pursue private benefits over control may undermine firm performance. In this paper, we answer the influence of large shareholder under different ownership structure; the constraint of the balance system of stockholder's rights on large shareholder's expropriation and so on.In this paper, we choose China's manufacturing listed companies as sample. Based on theory and research performance about this topic at home and abroad, we establish economic models and analyze the effect of large shareholder control on firm performance from the nature of the controlling shareholder, the largest shareholder stake and the balance system of stockholder's rights.Firstly, for all the samples, we use three models to study general impact of large shareholder control on corporate performance in China's manufacturing listed companies. Secondly, according to whether there are multiple large shareholders, we divide the samples into different groups and study the different impact of large shareholder control under different conditions. Then, according to whether the nature of the second shareholder is the same with the largest shareholder, we divide the samples into two groups and study the role of balance system of stockholder's rights on large shareholder. Finally, based on the empirical results, we propose suggestions to improve corporate governance structure. This paper reaches the following conclusions:(1) The performance of state-owned companies is prior to private enterprises; (2) Between the share holding proportion of the largest shareholder and firm performance, there exists the thrice function relation. In companies that only have a dominated large shareholder, there exists inverted U-curve relationship between the share holding proportion of the largest shareholder and firm performance. In companies that have multiple shareholders, there exists inverted U-curve relationship between the share holding proportion of the largest shareholder and firm performance too. In companies that have no shareholders, there exists linear relationship with negative correlation between the share holding proportion of the largest shareholder and firm performance. (3) There exists positive correlation between the balance system of stockholder's rights and firm performance. (4) The listed companies with multiple large shareholders outperform the other listed companies. (5) The phenomenon that the largest shareholder conspires with the second shareholder due to their same nature does not exist.