The Correlation Study Of Private Benefits Of Control, Capital Allocation And Performance Of Listed Companies

With the past decades development, China's capital market, from small to large, has made great achievements. At the same time, some deep-seated issues have been exposed, and were: the largest shareholder with control over the interests of minority shareholders against the act. Typical performance: (1) Occupied by major shareholders of listed companies'malicious funds, not only the amount is very large but also listed companies has seriously affected the normal operation and healthy development of China's securities market; (2) Related party transactions, some large shareholder's equity investment is not an investment objective of capital appreciation, but rather the objective of maximizing their own interests. Therefore, in the company's related party transactions, if its profit more than reduce the damage to the interests of the company's return on equity, under the control of major shareholders will tend to damage not only the company but also harm the interest of small shareholders association transactions. The reason is that the current stock market in China is closely related with the following two characteristics: (1) Shares of listed companies in China are divided into non-tradable shares and tradable shares, the former could publicly traded in the Shanghai Stock Exchange and Shenzhen Stock Exchange, while the latter can only be by agreement in the off-site bulk transfer; (2) China's largest listed company has absolute control over the majority shareholder, and the majority shareholder's stock almost all non-tradable shares.Therefore, having controlling right,large shareholders can use a series of behavors to enjoy private benefits of control. This benefits belong to the controlling shareholder, and are exclusive so that the small shareholders are not available, even at the same time these behavors would damage to the interests of the small shareholders. This general phenomenon of private benefits of control, has become focused object of the theory of corporate governance and capital financing research. In this paper, the study is from the following aspects.The first part,the introduction, describes the background and significance, research ideas and technical route, the paper's innovation and so on. The second part introduces the theory of this article, including the private benefits of control and so on. The third part qualitatively discusses affects of private benefits of control for capital allocation, company performance and explores optimization paths for capital allocation, company performance when there are private benefits of control. The fourth part is the empirical study, and the establishes the model between private benefits of control and the various factors associated with private benefits, then according to the model we get correlation conclusions. Finally, the paper gives the summary conclusions of this study and the prospect of the follow-up studies.In this paper, the private benefits of control issues will be sort out, based on empirical research using quantitative to find the causal relationship between control of listed companies in the private income and the allocation of capital (fixed asset investment and equity M & A), and measure the different control level of private benefits of investment in fixed assets and equity capital of M & A allocation whether they have differences, which explore the control of private income. To work out: (1) Private benefits of control of listed companies with a positive correlation between the allocation of capital; (2) the same level of private benefits of control investment in fixed assets and equity capital allocation of two M & A there is a significant difference; (3) private benefits of control between the performance of the company have a negative correlation.