Model And Performance Of Control Of The Company GEM Company Profile

The China’s growth enterprise market has been established for four years. China’s GEMbecomes more and more important in China’s capital market. Accompanied by enrichingthe capital market of China, GEM also causes a lot of problems especially the problem oflisted corporate governance. The allocation of controlling rights of GEM is more differentthan the usual listed companiesThe allocation of controlling rights is a very important part of corporate governance. It’salso a key factor to improve the performance of the company. Controlling rights is a verycomplex concept. The study of the controlling rights usually based on two perspectives: themarket of corporate controlling rights and the allocation of the controlling rights. My studyis based on the latter one and the main objective of this paper is to discuss the relationshipbetween the controlling rights allocation of China’s listed on GEM and how it affects theperformance of a company. The paper will discuss the relationship in both theoretical andempirical way and the purpose of the study is to find out the relationship so that we canimprove the performance of the companies.The controlling rights of the company should include many aspects, but the mostimportant parts are shareholders, boards and managers. So that if we want to know moreabout the controlling rights allocation we should make an overall view of the controllingrights allocation. The past study always based on one aspect, but this study will make thethree parts of the controlling rights allocation together to build a new comprehensivemodel. So that we can figure out how each part affects the corporate performance.The first three parts of the paper discuss the relationship between the controllingrights allocation and the performance in the theoretical way. The concept of the controllingrights can be concluded in two aspects. After that there is the review of the relationshipbetween each levels and the performance. The overall literature reviews help us to findhow the shareholders, boards and managers influence the performance separately. Thenafter introducing the characteristic of the GEM, This study separates the shareholders,boards and managers in its own way. After the classification there will be24differentmodels and the paper will explain and analyze each model.The second part of the paper is the empirical analysis. ROA, ROE and the mainbusiness profit margin are representing the performance and also size and asset liabilityratio are added as control variables. There are355samples. According to the regressionanalysis we choose business profit margin to represent the performance at last. There arethree conclusions of the study. The relationship between performance and the largest shareholder’s shareholding ratio is negative correlation. The independent boards help toboost performance. There are no significant relationship between the manager and theperformance. Also according to the study and analysis we find out that most China’s GEMcompanies are not in the most effective controlling rights allocation and there will be somesuggestions and proposals to solve these problems based on the research.