Analysis On Private Benefit Of Control In The Complete Free-float Era

The fight for control of GOME just ended at September 28, 2010 makes the topics of control is concerned. To the capital market, if you can control the company, you will have the rights of the company's operation, including increasing of stocks, issuing bond to finance and so on. It can be found from events of merging of the listed companies who transfers its control that the performance of acquired companies poor. As a rational economic man, what he/she contest the company's control for?The dissertation takes the above problem for the clue. First of all, the dissertation constructs Private Benefit of Control model for Chinese capital market in the complete free-float era based on the well review of previous studies and estimates the PBC level of the listed companies. Then referring to LLS (1999) and other ones"Ultimate Control Shareholder"idea, the dissertation divides China's Listed Companies into two kinds, that's the companies controlled by the central government and the companies controlled by the local government. The dissertation calculates and compares the scale of Private Benefits of Control of the 74 samples of the two kinds of companies happened during 2006-2009 in Shanghai and Shenzhen stock exchanges. Where doing this, the dissertation uses the adjusted premium model raised by Barclay and Holderness in 1989 and analysis the differences of Private Benefits of Control between various shareholders. The study discusses that PBC level during 2006-2009 decreases at the beginning and to the minimum in 2007, and then increases later in 2008 to the maximum; PBC level of the two kinds of companies increases with the proportion of controlling shareholders rising; PBC of the companies controlled by the central government is not only higher than the companies'PBC controlled by the local government and the average fluctuation is larger; Under the systematic condition in China the relative control of the largest shareholding is in the best balance and it is more obvious in the companies controlled by the local government than the companies controlled by the central government.This study is meaningful to find out the scale of every kind of the listed companies, the ultimate control shareholder rights structure of listed companies after the non-tradable shares reform. Through comparing the Private Benefits of Control scale of different companies, it is good to perfect the State-owned Asset administration, to supervise the capital market and listed companies, to find out better corporate governance, and all these are necessary to perfect the system aims at protecting small and medium sized investors.