Study On China's Political Relevance Ultimate Shareholders Of Listed Companies Private Tunnel Behavior

With the total circulation of the capital markets in China, ultimate shareholders would adopt tunneling behaviors more widely, concealment and variety due to the lake of effective external mechanism. It would harm to the value of the company and the interests of small and middle shareholders. So do China’s capital markets. Especially, the widely tunneling behaviors can aggravate the bankruptcy. To consider the system background and our government’s special position, ultimate shareholders of private enterprise established and maintain the political connection to countervail the unfair things during the production and management. But the political connection can also bring the bad thing, for example, it can let the ultimate shareholders prone to adopt tunneling behaviors and decrease the corporate governance. So, now it’s popular to study both political connection and corporate governance. This paper based on the phenomenon of political connection. Using "system background-political connection-Implicit guarantee-tunneling behaviors" as the analytical framework, we research the relation between them on the eyes of the field of informal system.Based on the theories of system transition, political market, social capital, political cost, executives’behavior, we put forward the question through the literature review. Then we collection the data of listed private enterprises during2009to2011, using fixed effects model of panel regression, see political connection as independent variable and tunneling behaviors as dependent variable. Our research aimed to find the relationship between them. And the results told us that there is a connection between them, and the impacts are changing due to the regions and the character of the ultimate shareholders. So we should do a rational choice when we decide to establish the political connection.