| In modern enterprises, the ultimate controller of cash flow right and control rightseparation phenomenon widely exists, they use their control power to seize privatebenefits which lead to the decline in corporate performance phenomenon that it isoften seen. Since2005listed companies in China has implemented the reformingnon-tradable shares. China has successively promulgated a number of constraintsbetween the laws and regulations of listed companies, thus, the ultimate controllers’cash flow rights, control rights becomes corporate governance and China SecuritiesRegulatory Commission the focus. Therefore, this paper selects the Pyramidownership structure and after the split share structure reform of listed companies assamples, from the nature of ultimate ownership and free cash flow angle, makes apositive analysis of the relation which is the ultimate controllers’ cash flow rights,control rights, the separation of two rights and corporate performance.First of all, the theory part, based on the principal-agent theory, private benefitsof control hypothesis, free cash flow theory, investor protection theory, elaborated thecash flow rights, control rights and the separation of two rights influencing oncompany performance; secondly, the empirical part, In Shenzhen, Shanghai Two cityA motherboard1002listed company2008-2010years of panel data as sample,according to expound the theory to put forward research hypothesis, and theconstruction of multivariate regression model; Then, using Excel, Stata11.0statisticalsoftware for each variable were descriptive statistical analysis; finally, apply fixedeffect model of panel data to do the empirical analysis, and conclude the study.The empirical results show that:(1) Ultimate controlling shareholders’ cashflow rights and corporate performance has a significant positive correlation. thecontroller has the cash flow rights more and more, the more he has the power to makethe company operates normally, thereby increasing the performance of the company,namely the “incentive effect”;(2) Ultimate controlling shareholders’ control rightsand corporate performance has a significant negatively correlation. Control rightsmore centralized, more conducive to the ultimate controller to gain, thereby reducingthe performance of the company, namely the “mining tunnel”;(3) The separation ofthe ultimate controlling shareholders’ cash flow rights,control rights and corporateperformance has a significant negatively correlation. Namely the separation of tworights is bigger, company performance is worse;(4) All samples will be in accordance with the free cash flow and the level of the ultimate controller properties were dividedinto two groups, studying the ultimate controllers’ cash flow rights, control rights andthe separation of two rights effect on firm performance, study finds: either in high freecash flow or low free cash flow situation, the ultimate controlling shareholders’ cashflow rights and corporate performance are positively correlated, the ultimatecontrollers’ control rights and corporate performance are negatively correlated, theseparation of two rights and corporate performance is negatively correlated, which, inthe high free cash flow, the separation of two rights on corporate performance ofnegative influence to the group was significantly higher than low free cash flow;(5)Either state-owned or non state-owned holding listed companies, control rights andcorporate performance is negatively related, but non state controlled listed companiesthan state-controlled listed companies more significant.Finally, according to empirical research conclusion, this paper puts forward tostrengthen internal supervision mechanism, perfect the construction of externalsupervision and market restraint mechanism, strengthen the listed companyinformation disclosure supervision, limits the ultimate controller control number andso on advice, which is to improve company performance and protect the smallshareholders and the interests of investors. |
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