Empirical Study On The Relationship Between Ownership Structure And Financial Distress Of Listed Companies

With the increasing maturity of China's securities market, the number, asset, operation and governance of listed companies have achieved considerable development and have gradually become the mainstay of the national economy. For various reasons, however, in the process of pursuing profits and value, many companies find themselves decline in performance, fail in operation, or even be trapped in financial distress, bringing their stakeholders great loss while severely reducing the efficiency of resource allocation. Although study on financial distress has long been a hot field of financial discipline, researches concerning the specific fields now mainly concentrated in the financial distress prediction models and financial distress costs, researches systematically studying causes and factors of financial distress are relatively be ignored.This dissertation reviewed the literature on the definition of financial distress, ownership structure and corporate performance on the basis of research results, and establish a "ownership structureâ†'Corporate Governanceâ†'Corporate Performance and Corporate Financial Distress" comprehensive theoretical framework. And analyzing theoretically each concentration of ownership structure, equity component structure, equity checks and balances, study 722 listed companies samples of 2006-2009 by the Logistic regression to verify the relationship between ownership and financial distress, main conclusions are as follows:(1) Ownership concentration negatively correlated with financial distress.(2) If existing state-owned shares controlling shareholders, the controlling shareholders shareholding ratio is significantly correlated with financial distress, the rest of the top ten shareholders and the proportion of tradable shareholders are related with financial distress but not significantly.(3) If existing legal person shares controlling shareholders, the rest of the top ten shareholders and tradable shareholders ratio are positively correlated with financial distress significantly, but the controlling shareholder and financial difficulties is not positively correlated significantly, also the "n" shaped relationship has not been verified.(4) If there is no controlling shareholder, the state-owned shares, legal person shares and the proportion of tradable shares are all positively correlated with financial distress.The main contributions are as follows,(1) Classified research literatures on checks and balances of equity structure, and in part of theoretical analysis between ownership structure and corporate performance, equity checks and balances is introduced into the analysis of impact on the corporate performance.(2) By referring to three main theories of corporate performance formation mechanism, derived an integrated performance formation and transmission mechanism consists of ownership structure, corporate governance and company performance three key variables, and with this mechanism study the relationship between ownership and corporate financial distress from the ownership concentration, ownership component, checks and balances of equity structure three perspectives.The deficiencies are as follows,(1) Because of sample selecting methods and data size limitations, empirical conclusions of the model involving the proportion of tradable shares is yet to be verified.(2) As a result of the overall study sample is selected as listed companies of all industries, empirical testing has not sub- industry respectively, the model explanatory power may be affected.