Research On The Relationship Between Ownership Structure And Corporate Performance From Endogenous Perspective

Over the past decade, the ownership structure is a hot issue in the capitalmarkets, which is a corporate governance mechanism fundamental issue. Afternon-tradable shares reform, with the open season of restricted shares, it is ahistorical era in Chinese capital market that moves from post non-tradable sharereform to the stock entire circulation. Gradually lifting a ban of restricted shares willpromote new changes on ownership structure. In such context, in order to providenew empirical evidence for exploring optimal ownership structure and enhancingcorporate performance, this paper attempts to utilize empirical research method, andillustrates the correlation between ownership structure and corporate performance.The theoretical part of this paper bases on the introduction of transaction cost,agency and corporate governance, theoretically analyzes the impact on the corporateperformance from ownership concentration and ownership balancing. On this basis,798listed companies in year2007to2010are used as sample data, which establishesa single equation model and simultaneous equation model, and utilize3SLS andGMM model parameters to illustrate the correlation between ownership structure andcorporate performance. Empirical results illustrate:(1) From endogenousperspective, the relationship between ownership concentration and corporateperformance affects by the performance indicators’ selection: the ownershipconcentration has inverted "U" shaped relationship with ROA, and no significanteffect on TQ70; ROA plays a driving role to ownership concentration, TQ70hassignificant negative effect on ownership concentration.(2) From endogeneity pointof view, the impact between ownership restriction and corporate performance is amutually reinforcing virtuous cycle.(3) From Dynamic Endogeneity perspective,ownership structure and corporate performance has intertemporal effects, however,the relationship was impact by the indicators’ selection as well. Based on empiricalconclusion, this paper gives suggestion that maintaining an appropriate degree ofownership concentration, enforcing ownership restriction, improving the investors’protection legal system and cannot complete copy the western policies.