Equity Control, Balance And Corporate Performance Research

Modern corporate system based on principal-agent theory of firm characteristics that improve corporate performance we first need to solve two problems:First, the conflict between principal(shareholders) and agents (managers);the second is the interest conflict between big shareholders and minority shareholders.These two types of agency problems is the theoretical basis to analyze ownership structure and firm performance relationship.In order to solve the above-mentioned two types of agency problems,we need to take certain incentive and constraint value,making the ownership structure of listed companies to achieve optimal,thereby enhancing the level of performance of listed companies.But there are no unanimous conclusion in the research between the equity control,equity balance and corporate performance from the existing literature.Therefore,more in-depth study on them has a certain practical and theoretical significance.This article is research by theoretical and empirical analysis to equity control,ownership balancing effect on corporate performance,and in the end of the article gives some policy recommendations.As the particularity of China’s national conditions, the majority of listed companies are state-owned enterprise restructuring, which would lead to dominance of such phenomena exist,have a negative impact the level of performance of listed companies.This article trying to find one of the most shareholding structure,which can effectively solve the two principal-agent problem by theoretical and empirical research, to achieve corporate performance maximization.In this paper,with a theoretical analysis, and in the latter part of the article through factor analysis,regression analysis, t-test, and ultimately come to the following conclusions:(1)It is a N-shaped relationship between equity control and corporate performance;(2)They have a positive correlation between corporate performance and the proportion of the top five shareholders and a negative correlation between corporate performance and the Herfindahl-Hirschman Index H5,that means the more decentralized the top five shareholders,the shareholding ratio gap is smaller,the better corporate performance;(3)Corporate performance and equity balance degree inverted a U-shaped relationship,that means the appropriate level of beneficial ownership balancing allows the company to maximize performance.This paper is divided into six chapters, each chapter is divided into the following ideas.The first chapter,introduces the research background of the topic,significance of the topic,and then write a literature review, through the study of literature scholars we elaborated the reason of that there was no consensus conclusion of the study,and in the end of this chapter I point out this paper’s framework and research methodology.In the second chapter I write the related theoretical basis of equity control, ownership and corporate performance and introduces the related concepts and their metrics.The third chapter is written in equity control, equity balances and corporate performance mechanism analysis,this chapter describes the relevant theory, and explains the relevant economic theory definition, then describe a detailed relationship between the equity control,equity balance and corporate performance.The fourth chapter is the empirical analysis,introduce data sources,target selection,research hypotheses.The fifth chapter is empirical results and analysis of the text by a factor analysis,descriptive statistics and regression analysis,tested the last chapter of the research hypotheses,and analyze the empirical results.The sixth chapter is the conclusion and policy recommendations, systematic summary the results of this study and on this basis put forward relevant policy recommendations.