Research On The Financial Risks Considering Ownership Structure Of Listed Companies

Recently, with the continuous development of stock market, listed companies in China make a spurt of progress in the development. By the end of2010, the number of listed companies in China is high up to2063, which increased by20.08%compared with2009.As the backbone of the enterprises in China; the ability to engage in various economic activities and participate in the market competition actively is being strengthened constantly. They make outstanding contributions to economic growth in China. While we are concerned about the achievements, we should not ignore listed companies own problems, such as irrational guarantee, excessive investment, substantial shareholders funds, and inappropriate related party transactions, which are likely to cause the stock price volatility and the financial position instability. The unreasonable ownership structure is one of important causes of the phenomenon. This is likely to cause the stock price volatility and instability of the financial position of listed companies, to induce the company’s financial risk, and increase the chance of the company in financial trouble. Thus this confirmed the ownership structure of listed companies has an affect on financial risk from the side.Based on the present situation of Chinese listed companies, this paper chose20072010manufacturing industry data as the research object. Ownership structure is the explanatory variable, and financial risk is explained variable. It analyzed the financial risks considering ownership structure of listed companies by SPSS statistic measurement tools, using descriptive statistics, multivariate linear regression method.The basic of thought of this paper is as follows:First, it introduced study background, study significance, innovation and limitation, the main content and study framework. Second, it briefly reviewed abroad and home literatures of relationship between ownership structure and financial risk from different angles. And then the author puts forward her own opinions. Third, it introduced concepts and judge index of financial risks and ownership structure and then it briefly introduced the present situation and character of ownership structure in China. It analyzed ownership structure has an affect on the financial risks in detail, and put forward the assumptions of this research. Fourth. we conduct the empirical analysis, and draw the relevant conclusion. Finally, Base on the above theory and empirical analysis, we put forward to the related suggestions on improving ownership structure and controlling the financial risk.The conclusions of empirical analysis are as follows:The equity property has no significant impact on financial risk, while it has a considerable impact. Ownership concentration and financial risk have a significant negative correlation, which means concentration ownership is helpful to reduce the financial risk. There is a positive relationship between equity balance degree and the level of financial risk. Senior management has a weaker effect on the financial risk. Based on the analysis above, the author optimized some measures to reduce the financial risks in order to avoid an enterprise to be immersed in financial crisis or predicament. First, the state-owned shares can not reduce blindly, and the concrete problem should be analyzed concretely. Second, improve institutional shares stock circulation. Third, protect the oriental share benefit, and carry out same share and right. Fourth, listed companies should maintain certain ownership concentration, and increase senior management shares of holdings, and perfect stock right stimulates mechanism. Fifth, perfect laws of stock market further, and strengthen the supervision.