Research On The Relationship Of Ultimate Ownership Structure And Corporate Performance Of The Listed Companies In SME Board

La porta, Lopez-de-Silanes and Shleifer (1999) firstly proposed theconcept of ultimate controlling shareholders, thought we should trace thecompany’s equity control chain to find the ultimate controllingshareholders in the study of ownership structure. They found that ultimatecontrolling shareholders exist in many listed companies of developedcountries and tend to through the pyramid shareholding structure,cross-shareholdings and multiple stock to achieve the goal of obtainingmore control rights by less cash flow. La Porta et al also analyzed therelationship of the ultimate controlling shareholder and corporateperformance and found when control rights deviate from the cash flowrights, the ultimate controlling shareholders have a strong incentive toseek control private benefits which damaged the interests of minorityshareholders and thus affect the corporate performance. La Porta et al’sresearch has created a great impact in the academic community. Sincethen, the domestic and foreign scholars began to study the relationship ofownership structure and corporate performance from the perspective of"ultimate control right".Based on the above background, This article uses La Porta et al’sresearch method for reference, selects the data of30listed machinery andequipment companies of SME board in2009-2011as research samples,and finds the ultimate controlling shareholder of the30samples by tracing the equity control chain. After that, using descriptive statisticalanalysis, factor analysis and multiple regression analysis to empiricalresearch the relationship among the ultimate control right, the cash flowright, the separation of two rights and the corporate performance. Theresults show that:（1）The ultimate control right is negatively related tocorporate performance significantly. The control right more higher，theultimate controlling shareholder is more likely to seek private benefits ofcontrol by way of encroaching on the interests of small shareholders, andthus produce a negative impact on corporate performance.（2）There is asignificantly negative correlation between the cash flow right andcorporate performance, the hypothesis about the cash flow right andcorporate performance is not supported. This may be related to theultimate controlling shareholder’s "predatory dividends" behavior.(3)There is no correlation between the separation rate of two rights andcompany performance. the hypothesis about the rate separation of tworights and corporate performance is not supported. The separation rate oftwo rights and company performance do not pass the test of significancein the correlation analysis and multiple linear regression analysis. Incurve estimation analysis the goodness-of-fit of quadratic model andcubed model are very small and do not pass the test of significance.Therefore, the empirical analysis indicates that the separation rate of tworights and corporate performance is not related.(4) This paper has also tested that the company size and the capital structure have affected oncorporate performance. There is no significant correlation between thecompany size and the corporate performance. It illustrates that scaleeffect is not reflected in the sample companies. There is a significantnegative correlation between corporate performance and asset-liabilityratio which on behalf of the capital structure. Leverage has failed toimprove company performance but has played a blocking role, it showsthat many of sample company’s capital structure is irrational. The last,based on the conclusion and according to the characteristics of listedcompanies in SME board, the thesis puts forward some targetedsuggestions.