Study On Shareholder’s Type And Reduction Motivation Of Non-tradable Shares

The capital market reconstruction resulting from Split share structure reformproduces a powerful impact on the behavior of the individuals in micro-marketgradually. Micro-individuals pursues their own benefit maximization through thereduction or increase of shares. In the process of reduction of non-tradable shares,different types of shareholders are diverse in reduction numbers, selection of reductionperiod and other considering factors, then various influence of their reduction to thesecurities market will turn up. The formation of optimal ownership structure is adynamic process. In this process, different shareholders reduce or add their shares.In theequity highly centralized market, the behavior of shareholders’ increasing or decreasingshares directly affect the ownership structure, hence the reduction of non-tradableshares is in essence a optimal ownership structure dynamic selection problem.From the point of the optional ownership structure theories and the behavior ofindividuals in micro-market, the paper adopts normative analysis and empirical researchto study di reduction motivation of different types’ shareholders. Firstly, the papersummarizes the mainstream theories of the optimal ownership structure and mainrelated research results of reduction of non-tradable shares. What’s more, it analysesand review theories of the stock market supply and demand, the controlling shareholderand private income and the non-controlling shareholder and behavioral finance.Sencondly, the paper builds a model of different types of shareholders’ reductionmotivation in view of the model of the Parigi.etc and Huang Zhizhong’s methodcombining with the actual situation of China’s stock market. Thirdly, it reveals theinference’s rationality and applicability collectively according to the empirical test ofthe real data in Shenzhen stock exchange from2006to2011and the case analysis ofSichuan Hongda Co.,Ltd and Shanghai Huitong Energy Co.,Ltd in Shanghai stockexchange. Finally, This article put forward relevant policy suggestions from threeaspects aiming at behavior characteristics of different types of shareholders and theirreduction motivation, which are optimization listed company governance structure,innovation the way of supervision and enhance information disclosure as well asbuilding a sound legal system to protect investors.The reseach concludes that the low corporate performance, high valuations, thestrong invest risk and the motivation to reduce the tunneling cost effect the reduction of controlling shareholders, and substantial shareholders but not controllers don’t considerthe low corporate performance, high valuations as well as weak closely held ownershipstructure, while the reduction motivation of small and medium shareholders comes fromthe low corporate performance and high valuations.