Introducing Foreign Shareholder Of Private Ownership Structure And Operating Performance Of Listed Companies In Our Country Relations Impact Analysis

Since the Second Session of the Ninth National People’s Congress included non-public economy as main component of’China’s market economy’in1999, private economy represented by private enterprises gradually began to ascend the history stage. For thirteen years, the private enterprises have made significant contribution to China’s economic development and social progress. They have become an important part of the national economy. Currently, our country’s economy enters into a new track, economic development model is in the crucial period of transformation, the market environment is not perfect and the system has some flaw, the private enterprises face several kinds of problem.Especially the private public companies, because of congenitally deficiency, although with the capital market’s benefit, they still have many problems in management and development. They need standardization and improvement urgently. Since reform and opening up, our capital market has opened the door to the international capital gradually. The entry of foreign capital has brought fresh blood to China’s economic development and certain influence to the corporate governance and performance. They give hope to the private public companies which are confused by the reform. Foreign shareholders have formed restrictive effect to the original shareholders. Weather they could play a supervisory role effectively and increase corporate value becomes a hot research topic.This paper combines the ownership structure and property and corporate performance together initially. The main content is about whether the foreign shareholders have brought major changes to the relationship of the separation of two rights and corporate value in the private public companies. This paper firstly explores the ultimate control right in theory, discusses the concept of Pyramid Ownership Structure and Two Right Separation (control right and cash-flow right), then analyzes the relationship between the degree of separation of two rights and corporate performance; Then next based on the review of the course and way of foreign shareholders entering the private enterprises, this paper introduces the foreign shareholding situation and analyzes its relationship with corporate performance; further we have an empirical study. Samples are selected from the two stock markets (Shanghai&Shenzhen), based on the established models we have done the regression analysis. We try to study the relationship of two rights and corporate performance from the ultimate controllers’point of view. Then we attempt to do the controlling shareholders’ behavior constraint mechanism research from the aspect of foreign shareholders’ introduction. Through the research, we found there indeed exists that ultimate controllers encroach upon corporate value through the building of Pyramid Ownership Structure. The more serious of the two rights’ separation, the more obvious the ’entrenchment’ phenomenon will be. Foreign shareholders’ join will bring some constraint to the ultimate shareholders ’expropriation. And because of different types of the foreign shareholders, the constraint effect is also different.There are six chapters which can be divided into four parts:The first part, including Chapter1and Chapter2, is mainly the introduction and theoretical basis. We give the theoretical analysis and literature review on the relationship between Two Right Separation and the corporate performance, the relationship between the foreign shareholders and corporate performance, so to lay the foundation for the later chapters;The second part including Chapter3mainly defines the concept of private public companies, the separation of the two rights and the foreign shareholders’ entering history and development situation;The third part included the Chapter4and the Chapter5. This part gives the research hypothesis, theoretical model, model building and the empirical study.The fourth part is just the Chapter6, conclusions and policy recommendations. As the last part of this paper, we summarized the main conclusions and put forward policy proposals, research deficiency and the future prospect.