An Empirical Research On The Relationship Between Ownership Structure And Corporate Performance Of GEM Listed Companies

The Chinese Growth Enterprise Market was born in October2009, and there are355companies listed on GEM up to January4,2013, and these companies have been a new member in Chinese capital market. The fast development of GEM makes these companies attract the focus of medium and shareholders.The companies’ownership would be dispersed after listed on GEM gradually, principal-agent relations between managers and shareholders also aroused, as a result, the problem of principle-agent between managers and shareholders are produced. Therefore, it is important to solve the problem of principle-agent and evaluate the corporate performance in a reasonable way. At the same time, what factors affect the performance of these companies listed on GEM attract increasing attention of scholars. Based on the past scholars’ research, the relationship between ownership structure and corporate performance is a hot research topic.Domestic scholars who did research on the relationship between ownership structure and corporate performance of Chinese companies mainly focused on companies listed on the Main Board, and fewer scholars did research on the relationship between them listed on GEM. The most significant difference of the ownership structure between GEM and Main Board is that the managers of these companies hold a large number of stocks, and the first major shareholder is a natural person or corporate shareholder, in other words, most companies are held by a natural person effectively, and the natural person shareholder always work as managers, which means the managers and control shareholders have common interest.This paper chooses281companies that listed on GEM before December31,2011as sample. The whole paper is divided into two sections:in the first section, the article concludes the characteristics of GEM by comparing the GEM with Main Board and Small and Medium-sized Board, and then review domestic and foreign literature. After that, the article expounds the theory of separating of two powers, the principal-agent, stakeholder and the theoretical principle between ownership structure and corporate performance. In the second half, the paper analyzes the relationship between structural characteristics and corporate performance by using the method of empirical analysis, then summary the conclusions at the end of the paper. Also, on the basic of these conclusions, the paper offered some proposals.This paper includes six parts:The first part is introduction:at the beginning, this part analyses the characteristics of GEM by comparing the GEM with Main Board and Small and Medium-sized Board in order to support the following conclusions and suggests, then describes the research methods of study, the structure of this article, as well as innovation of this paper.The second part is literature review. This part summarizes the research findings on the basic of literature review in order to support the empirical analysis.The third part is theoretical principle and research hypothesis. Firstly, explains the theory of ownership structure, and then proposes the hypothesis.The forth part is the research and design. This part determines the variables and empirical model.The fifth part is the empirical research on the relationship between ownership structure and corporate performance of GEM listed companies. The descriptive analysis method is adopted firstly to find the characteristics of ownership structure and corporate performance. Then uses the method of correlation analysis to find the correlation of the property of shareholder, ownership collecting and management shareholding ratio. At last, the influence of the factors of the ownership structure on the corporate performance of GEM listed companies is analyzed emphatically by using empirical analysis method. At last, the assumptions are checked subsequently.The sixth part is empirical results and policy recommendations. Based on the empirical results, theory and realistic situation provide suggestions on enhancing corporate performance, and look forward to the future. Then summary the deficiencies of this paper, as well as the recommendations for the further study.By the regression of Tobin Q with ownership structure variables, the results show as follow:(a) State owned share and corporate performance has a positive correlation but insignificant.(b) There is a positive correlation between corporate shares and corporate performance.(c) Outstanding shares and corporate performance has a negative correlation.(d) Institutional shareholdings have a high-positive correlation with corporate performance.(e) There is a positive correlation between ownership concentration, ownership balance and corporate performance.(f) Management shareholding and corporate performance has a positive correlation but insignificant.(g) Asset-liability ratio, company size has a negative correlation with corporate performance. The growth of a company has a positive correlation with corporate performance.