Empirical Study On Corporate Governance Influence On Large Shareholders’Tunneling Behavior

Large shareholders’ tunneling phenomenon under corporate governance has been a hot issue of global concern. In the period of economic transformation, and also "one share jumbo" phenomenon is particularly serious in China, large shareholders’tunneling is a focal problem of management practice. Facts have proved that large shareholders of listing Company often use their strong control ability to run the management decision in their own interests and then they can tunnel the firms and damage the interests of minority shareholders. The characteristics of corporate governance structure reflect the true management level of listing Corporation, on which research has become a breakthrough in solving the problem of large shareholders’ tunneling. However, with the development and perfection of the corporate governance system, this tunneling phenomenon has not been effectively reduced. Therefore, it has become a new research direction to further explore the role that the legal and perfect company system assumes in the procedure of corporate governance structure influence on large shareholders’ tunneling.Therefore, based on summarizing the previous researches, this paper firstly analyzes the mechanism of corporate governance structure influencing on large shareholders’tunneling, after that, and further explores the role that the mediating variables assume in the impact process such as company constraint level and company incentive level, and puts forward respectively the research assumption and establish an empirical model. And next, taking1112a-share companies listed on Shanghai and Shenzhen Stock Exchanges from2008to2011as research samples, and putting the separation degree of the cash flow rights and control rights of the ultimate controlling shareholders as the measurement index of the degree of large shareholders’tunneling, this paper verifies the above hypothesis, and puts forward corresponding countermeasures and suggestions according to the empirical results. The results of the study show that:(1)Comparing with non state-owned listing Corporation, the degree of large shareholders’tunneling of state-owned listing Corporation is relatively low. This difference in part is due to mediating variable such as the agency cost making the influence on large shareholders’tunneling, that is, the agency cost of state-owned listing Corporation is relatively high, therefore, the company binding is relatively strong, which is not conducive to large shareholders’tunneling.(2) A "U" type relationship exists between tunneling and the proportion of ultimate controlling shareholder. And in this process, the proportion of ultimate controlling shareholders exerts the influence on tunneling behavior through reflecting the agency cost of company constraint level, while company incentive level has no effect in this process.(3)It exists a negative correlation between the concentration of ownership and large shareholders’ tunneling,that is, the higher the concentration of ownership of listing Corporation, the balance supervise of several big shareholders is more likely to reduce the hitchhiking behavior, which is not conducive to big shareholders’ tunneling. The agency cost and the managerial compensation do not play an intermediary role which respectively reflects company constraint level and company incentive level in this influcing process.(4)It doesn’t exist significant relation between equity restriction ratio and large shareholders’tunneling behavior,that is, the second to ninth largest shareholder can not effectively balance decision-making behaviors of the first major shareholder and can not restrict controlling shareholders’ tunneling behavior.(5)It exists significant negative correlation between the proportion of independent directors of listing Corporation and large shareholders’tunneling behavior,that is, the higher proportion independent directors in the board of directors of listing Corporation, the decision-making behavior of large shareholders is more likely to be effectively supervised and the controlling shareholders’ tunneling behavior is more likely to be restrained. In addition, the agency cost and managerial compensation make no effect in this process.(6) The duality of listing Corporation has no significant effect on large shareholders’ tunneling behavior.(7)The board of supervisors of listing Corporation have negative influence on controlling shareholders’ tunneling behavior, but the effect is not significant. The members of the board of supervisors of listing Corporation fail to effectively control the tunneling of major shareholders, this may be because some members of the board of supervisors also hold stakes in listing Corporation and they are the identity of the major shareholder in themselves.