Research About The Impact Of The Equity Structure On The Corporate Performance Of China’s Listed Companies

A favorable corporate governance mechanism is capable of enhancing the operation efficiency and the competitiveness, ultimately maximizing the value of the company. Different equity structure means the differences of equity proportion structure distribution and nature of equity. As the foundation of the property rights of the corporation governance structure, the equity structure determines the composing and running of the internal and external corporate governance mechanism and influences the corporate performance.Shareholder posses the primary ownership of capital devotion, and enjoy the right of final control of the firm and the right of benefit in nature. No cooperation with the stakeholders, do not enjoy property rights on capital, cannot create residual value. Therefore, the interests of shareholders are not isolated, but contact with the interests of stakeholders together. The final allocation of residual value depends on the explicit or implicit negotiations between the participants and the environmental conditions of the negotiations in company. These negotiations will ultimately determine the combination and arrangement of internal capital. Different combination and arrangement of capital, the share of residual value will be completely different. There will be a conflict between residual claimant and the other members. Because the others, such as managers, do not enjoy property rights on capital and bear the risk of loss, they may deviate from the interests of shareholder. Equity proportion is highly concentrated along with the controlling shareholders existing. Controlling shareholders’ exploitation and infringement upon small shareholders aroused the second agency problem in the capital market. This paper follows this analysis path:equity structure—governance mechanism—enterprise value, in order to reflect the enterprise’s internal economic relations accurately and research the influence of equity structure on enterprise value.The paper includes of six chapters, and the research contents are listed below: Chapter1IntroductionIt proposes the issue, the significance and the methods of the research. Part of the research ideas, the angle of the research is divided into two aspects, Horizontal industry and longitudinal economic environment analysis, in order to study the influences respectively. And thus offers use the method of elaborates and detailed technology roadmap to make it clearer.Chapter2Review of literaturesThe chapter from the equity structure of two dimensions respectively, equity proportion structure distribution and nature of equity and how they will affect enterprise value is reviewed and commented.Chapter3Theoretical AnalysisOn the basis of need, this chapter defines the extension and intension of some important concepts, reconstructs individual concepts. Lastly, these theories which drive the study on the influence of equity structure on enterprise value are summarized.Chapter4Assumptions, Variables, and Models.This chapter first put forward the hypothesis on the basis of theoretical analysis, and describes the sample selection method and data sources in detail. Secondly, this chapter sets the experimental and control variables. Then, in order to test the hypothesis, this chapter constructs the research models.Chapter5Empirical ResultsThis chapter combine the Descriptive Statistics Analysis with the OLS Regression Analysis, make an empirical test about "the influence of equity structure on enterprise value". The first part sum up the diversities of the equity structure character in different industry. The second part probes the effects of equity structure on enterprise value in economic crisis pre and post. Further, government intervention may be involved in the ownership control as a negative regulator when experiencing crisis.Chapter6Conclusions, Recommendations and Ideas for ImprovementBased on theoretical analysis and empirical results, the chapter reached the final conclusions of this paper. Under the analysis of the conclusions above, the chapter put forward some recommendations to weaken the inefficient corporate governance mechanism in listed companies. The main contributions of this paper are:Firstly, except following the traditional research frame to study the impact of equity structure on corporate value in the population, this paper make the diversity of influence in different industry as research target. The specific impact of equity structure on corporate value is closely related with such factors as market barrier, competition degree, bargaining power. The equity structures of listed companies in China basically follow the rule of the market evolution, many of which are the result of System Reform. Obviously, research perspective of horizontal industry is essential.Secondly, this paper breakthrough previous study limited to the internal corporate governance environment extends research perspective to the exterior macroscopic environment, Taking2008financial crisis as a chance. This attempt not only to overcome the Endogenous Character of the previous studies, but also examine the impact of different nature of equity on corporate value at an advantage, under the background of the crisis environment.The new point of this paper includes:(1)Improvement of experimental variablesThis paper chooses return on assets as experimental variable, when metering enterprise value. Critics assume that the conventional approach to a enterprise value, based on its fiscal data, emphasize on evaluating afterwards and not a prospective one. If using Tobin’s Q as an experimental variable, able to overcome the deficiencies of the fiscal data and give a judgment for future profitability. But there is a serious defect that weak form market of Chinese security market can’t meet the assumption of using Tobin’s Q.(2)Change the research perspectiveThis paper makes some similar conclusions that controlling shareholder has a positive effect on improving enterprise value like the related topic literature, especially in this stage that legal is inadequate to protect investors. Constrained by primary research thinking, this paper is supposed to reveal the controlling shareholder detract from enterprise value during pursuing private benefits. But the criterion analysis and the empirical study have verified controlling shareholder isn’t always a pronoun of loss. So in what areas and whether can get the support of the empirical evidence if private benefits of control may be positive for enterprise value. The above-mentioned problems are yet to be further research.