Research On Ownership Structure And Tunneling Behavior Of Controlling Shareholder

La porta (1999) pointed out it was common for modern enterprises to have controlling shareholder ,and the shareholder would carry out tunneling for its own interests at the expense of other shareholders, which would led to a new agency problem between controlling shareholders and minority shareholders. Most of our listed enterprises are state-owned and their shares are highly concentrated. Under China's special institutional background, such as split share structure, controlling shareholder has not only motivation but also ability to carry out tunneling in the way of embezzling fund, cash dividend and etc. The exposed scandal of tunneling in some listed enterprises in recent years also shows that the tunneling carried out by controlling shareholder is not just individual phenomenon. Tunneling not only affects the performance of the enterprise but also does harm to the interests of small investors. What's worse, tunneling will do great damage to the formal order of our security market, making the investors lack confidence in investment, and then distort the allocation of resources.As the basis of governance structure, ownership structure affects the value and performance of the company. After the reform of split share structure, since the non-tradable shares become tradable, and the share proportion of controlling shareholders declines, there is some change in ownership structure of the company. This paper tends to analyze tunneling of controlling shareholder after the reform of split share structure from the perspective of ownership structure, that is to say the relationship of ownership structure and tunneling.Empirical analysis method is main analysis method of this paper. On the basis of relevant literature at home and abroad, this paper will analyze the relationship of ownership structure and tunneling from the perspective of ownership concentration, outside blockholders and ownership property in the basic framework of theoretical analysis, empirical analysis and recommendations. The paper is divided into six chapters, the main contents of each chapter are as follows: Chapter One is Introdution.As a starting point of this paper, this chapter mainly introduces the background, goal, idea and method of this study. Furthermore, it also covers the structure and significance of this paper.Chapter Two is Literature Review. This chapter mainly reviews the relevant literature at home and aboard from these three aspects, which are ownership concentration, outside blockholders and ownership property. After reviewing the literatures, the paper proposes four doubts:firstly, is there any mutual influence between different methods of tunneling; secondly, is there different relationship between ownership concentration and different methods of tunneling; thirdly, how do other major shareholders influence the controlling shareholder's behavior of tunneling; forth, does the controlling shareholder with different ownership property have different favor in different methods of tunneling. The paper will discuss in the perspective of this four doubts.Chapter Three is Institution background and Status description. In this chapter, it first analyzes the institution background of tunneling, which mainly contents the special issuance examination system, split share structure, government intervention, corporation governance structure, regulatory environment and etc. Then using all A-share listed companies from 2007 to 2009 as its sample, it describes and analyzes the status of the ownership structure in China. At last, it describes the status of tunneling from the aspect of embezzling fund, cash dividend.Chapter Four is Theoretical analysis and Research design. This chapter is a prerequisite for empirical analysis. In this chapter, it puts forward seven hypotheses on the basis of theory analysis. After deleting some of all A-share listed companies with a set screening criteria, it finally determines 2284 companies as research samples. Then, it further determines the substitution variables and research mode, the basis of further empirical analysis.Chapter Five is Empirical Analysis. This chapter is the main part of this paper. First, it analyzes the variables through descriptive statistical analysis and correlation analysis; then, it examines the impact of ownership property on the ways of tunneling with the method of single factor analysis. Furthermore, through the method of multiple factor analysis, it respectively examines the mutual influence between embezzling fund and cash dividend and the impact of ownership concentration or outside blockholders on different ways of tunneling. At last, it does robust test to examine the robust of the conclusion and finds the conclusion is robust.Chapter Six is Conclusion and Suggestion. In this chapter, it first makes conclusion on the basis of empirical analysis, then with the conclusion and reality, it proposes suggestion of how to find and inhibit the tunneling. At last, it puts forward the inadequacies of the paper and the direction of further study.Through the empirical analysis, we come to such conclusion about the relationship between ownership structure and tunneling:(1) There is truly some interaction between embezzling fund and cash dividend, but the interaction is not a simple linear relationship.(2)There is a negative linear relationship between ownership structure and embezzling fund, while it a positive linear relationship between ownership structure and cash dividend. That is to say, the controlling shareholder with higher share proportion tends to carry out tunneling through cash dividend, while the controlling shareholder with lower share proportion tends to carry out tunneling through embezzling fund.(3)There is a U-shaped relationship between the outside blockholders and embezzling fund, while it a inverted U-shaped-relationship between the outside blockholders and cash dividend. That is to say, when other major shareholders have strong ability to contend with the controlling shareholder, they two will easily form an alliance to carry out tunneling; on the other hand, if the major shareholders'contend ability declines to certain degree, they will supervise controlling shareholder's behavior of tunneling.(4) Compare with the non-state-owned, the state-owned controlling shareholder prefers to use cash dividend to carry out tunneling; when it refers to the way of embezzling fund, there is no different favor for the different ownership property.