Research On Ultimate Control Rights And Changing The Use Of Raised Funds Of The Listed Companies

With the deepening research in the field of corporate governance and related areas, the issue of controlling rights especially conflict of interests between ultimate controlling shareholders and medium and small shareholders becomes the focus of attention by most scholars. Research shows that many irregularities in Chinese securities market are related to ultimate control rights. The ultimate controlling shareholders in listed companies obtained higher control rights than cash flow rights through the pyramid ownership structure or cross-shareholdings method, causing a divergence between cash flow rights and control rights. Whether this kind of divergence will affect the listed companies to change their decision-making behavior in raising funds?From this unique perspective, this paper investigates the changing behavior in raising funds by listed companies. First, we have arranged the materials and theory studied before in this paper, at the same time, summarized and concluded research products. Then, we discusses the possible impact of new agency cost to the changing behavior of raised funds, represented by characterization of control properties, and proportion of cash flow right and control rights.Finally, based on the theoretical analysis and assumption,we take 2003-2004 IPO companies which changed their use of raised funds in the security markets of Shenzhen and Shanghai as the research objects to carry out empirical research.The results showed that:(1)the government controlling and non-governmental controlling types of listed companies have significant differences in changing decisions of raised funds; (2)we find reverse U shape relationship between the ultimate control rights of controlling shareholders and the proportion of changing raised funds;(3)cash flow rights will reduce the increasing tendency of changing raised funds ;(4)with the divergence between control rights and cash flow rights , the ultimate controlling shareholders have greater motivation to change their raised funds so as to obtain more private income.