Reseach On Influence Factors Of Controlling Shareholders’ Tunneling And Propping Behavior

The American scholars Berle and Means proposed the separation of corporate ownership and management in1932. From then on, the primary problem of corporate governance lies in the conflict between owners and operators. However, from the late ninety’s of the20th century, scholars generated suspicion to this conclusion, they begin to pay attention to the conflict between controlling shareholders and medium or small shareholders. As a representative, La Porta found that the conflict between controlling shareholder and medium or small shareholders is the main problem in corporate governance research. Therefore, the research on the controlling shareholders’behavior has become the focus of academic research problems.Principal-agent theory and Insiders benefit expropriation theory show that controlling shareholders will empty or support the listed companies with the control power. Controlling shareholders’ frequent tunneling behavior damages the interests of medium and small shareholders seriously, and it also brings some supervision pressure to the securities supervision department. However, the controlling shareholder will not always empty the listed companies, they will support the listed companies in some cases. As a result, it will be very important to inhibit controlling shareholders’ tunneling behavior and encourage controlling shareholders’ propping behavior, and it need us to research the controlling shareholders’ tunneling and propping behavior and their influence factors.1. Research objectivesThe research on Influence factors of controlling shareholders’tunneling and propping behavior has the important practical significance:Firstly, the research can provide some theoretical guidance to the listed companies’corporate governance, and give some advice for the listed companies to regulate the controlling shareholders’behavior too.Secondly, the research can give some advice for the investors to make the right investment decisions. Finally, the research can give some advice for the securities supervision department to maintenance the interests of medium and small shareholders and perfect the supervision system.2. Research contentBased on the principal-agent theory, the information asymmetry theory and insiders benefit expropriation theory as a foundation, this paper proposes the hypothesis that the capital occupancy between the controlling shareholders and the listed companies is the controlling shareholders’ tunneling and propping behavior. After confirm this hypothesis, we distinguish the main and secondary factors with multiple regression analysis, and then we also analyse the relationship among the influence factors and the controlling shareholders’ tunneling and propping behavior.3. The main contributionsThe main contributions of this paper include the following three aspects:Firstly, it distinguishes the main and secondary factors of the controlling shareholders’ tunneling and propping behavior. With multiple regression analysis, we distinguish the main factors and secondary factors and also analyse the relationship among the influence factors and the controlling shareholders’ tunneling and propping behavior.Secondly, this paper introduces variables from the controlling shareholders itself and the listed companies related factors. In order to select the influence factors of controlling shareholders’ tunneling and propping behavior, we introduce variables from the controlling shareholders itself and the listed companies’ corporate governance and financial index related factors.Thirdly, the comparative analysis among influence factors of controlling shareholders’ tunneling and propping behavior. On the basis of the comparative analysis, we find that the main factors of controlling shareholders’ tunneling behavior are controlling shareholders’ property, the degree of ownership restriction and the proportion of independent directors; the main factors of controlling shareholders’ propping behavior are the controlling shareholders’ shareholding percentage, the company growth and the asset-liability ratio.