An Empirical Study On The Relationship Of Ownership Structure And Corporate Performance Of Cross-Listed Enterprise

Cross listing refers to the situation in which a company has its stock listed on more than one exchange. In recent years, an increasingly number of Chinese companies has their shares cross listed in both domestic stock market and foreign stock market. Although there are only a few companies made the choice to cross listing a few years ago. Many companies listing in foreign stock exchange decide to issue their shares in domestic exchange, at the same time, some companies listing in domestic exchange make the opposite decision nowadays. Cross listing is having a significant impact on investors, listed companies and stock exchanges. Compared to the normal companies, do cross-listed enterprises have satisfied ownership structure and better performance under the rigid supervision? How is the relationship between the ownership structure and corporate performance of cross-listed enterprises? Is there distinct differences compared to the non cross-listed companies? This paper focuses on the relationship of ownership structure and corporate performance of cross-listed enterprises through an empirical study. And find out the possible reasons behind the differences, in order to further promote the development of China’s capital market, minimize the gap with international exchange, and improve the overall quality of listed companies in domestic stock market.Based on the review of related literature and theory both on cross listing and the relationship between the ownership structure and corporate performance, totally1209listed companies before the year2006were chosen as samples, five years’ data (2006-2010) were selected under SPSS statistical test, the overall samples were divided into two groups:29cross-listed companies and1180non cross-listed companies. The correlation between the ownership composition, ownership concentration and the corporate performance measurement Tobin Q is under studied based on the financial data provided.Empirical results indicate that the overall behavior of the cross-listing plays different roles in changing the relationship between corporate governance and business performance. For some indicators, the cross-listing plays a positive regulatory role on the correlation of ownership structure and business performance, for the remaining indicators, cross-listing has played a negative or does not play a significant regulatory role on the correlation of ownership structure and business performance. The results suggest that cross-listing does not fundamentally improve the relationship corporate governance and corporate performance. In the final part for this paper, based on theoretical analysis and empirical test results, combined with our history of the modern enterprise system, the market background of era stock-reform, corporate governance environment, governance characteristics. A summarization about performance of governance of shares and its impact on the company’s operating for cross-listed companies. After this policies and proposals towards the issues about the improvement of ownership structure, and how to make a rational choice for abroad listing have been provided.