Research On The Constraint Of Bank Credit Management To The Expropriation Of Large Shareholder

The ownership structure of listed companies in China is still concentrated，thespecial ownership structure determine large shareholders and minority shareholdersas well as the interests of creditors conflict is the main problem of corporategovernance. In recent years, the number of bankrupt companies due to theexpropriation of large shareholder is rising. The expropriation of large shareholderhas been widespreadly concerned by the academia and regulatory authorities.The existing studies about the expropriation of large shareholder pay closeattention to corporate governance structure and ownership structure. The literatureswhich specialize in the constraint of bank credit management to expropriation oflarge shareholder is rare. Expropriation of large shareholder not only plunder theinterests of minority shareholders, but also threaten the interests of bank creditors，thus the banks have sufficient power to restrict the expropriation of largeshareholder. In order to have a comprehensive understanding of the constraint ofbank credit management to expropriation of large shareholder, this paper add inChina’s special institutional background.The study of the constraint of bank credit management to expropriation of largeshareholder can not only enrich the existing theories about bank credit managementand expropriation of large shareholder，but also can resolve the problem ofexpropriation of large shareholder and improve the bank credit management. It cancontribute to the completion of the financial environment of the banking businessand the governance structure of listed companies, therefore this study has both greattheoretical and practical significance.Based on the results of previous theoretical research about the expropriation oflarge shareholder and bank credit management, this paper studies the constraint ofbank credit management to expropriation of large shareholder. This paper carry out atheoretical analysis about the expropriation of large shareholder and bank creditmanagement firstly, provide theoretical support for the later. selecting A-share listedcompanies in China’s Shanghai and Shenzhen stock market from2008to2010asresearch sample, this study tests the constraint of the proportion of bank loans andbank loan term structure to the expropriation of large shareholder respectively bymultiple linear regression and investigates the difference constraint under thedifferent equity nature and the market process. The conclusion is:(1) bank creditmanagement have no constraint to the expropriation of large shareholder, bank loans can exacerbate the expropriation of large shareholder;(2) When the bank loansbelow60%, bank credit management can not restrict the expropriation of largeshareholder, however, when the bank loans is higher than60%, bank creditmanagement have a certain restrict on the expropriation of large shareholder.(3)Both short-term bank loans and long-term bank loans can not bridle theexpropriation of large shareholder, but the short-term bank loans’ restriction to theexpropriation of large shareholder is better than long-term bank loans’ restriction tothe expropriation of large shareholder.(4) The significant positive correlation aboutthe constraint of bank credit management to expropriation of large shareholder instate-owned enterprises and areas with low degree of market process is higher thanthat in non-state-owned enterprises and areas with high degree of market process.Finally，combined with the actual situation of China’s listed companies，thispaper proposes policy recommendations：establish a clear relationship betweenownership, improve the corporate bankruptcy system, strengthen the cooperationbetween the bank, enhance the regulatory mechanism of the bank creditors.