Inhibitory Effect Of Institutional Investors On The Private Benefits Of Controlling Shareholders

In recent years, China’s listing Corporation shareholders "tunnel hollowed out" itsholding company’s common self-interest behavior. In the economic turmoil downturn in2013, listing Corporation stock price fluctuations continuously and hit a new low, butthe controlling shareholder is the use of the hand control malicious from a controlledcompany for personal gain, serious damage to the legitimate interests of small andmedium shareholders, reduce the controlled company value. In this context, thecontrolling shareholder of the "Tao" once again become the focus of attention of thecommunity, inhibition of the controlling shareholder of private benefits of control inorder to protect the interest of the minority shareholders has become a key problemurgent need to resolve.At present our theoretical study mostly from corporate governance internalsupervision mechanism of inhibition of controlling shareholder self-interest behavior ofpower, and for the introduction of external oversight mechanisms to inhibit the privatebenefit of control is relatively little research. Some research indicated that, theproportion of independent directors and major shareholders capital occupying asignificant negative correlation, self interested behavior effective equity structure caneffectively improve the controlling shareholder of the. That the theory of corporategovernance, to reduce agency cost of small and medium shareholders, balance ofownership is an effective constraint mechanism. However, internal equity restrictionmechanism to make power parties to take "synergy", intensified the interests of smallshareholders abuse. To solve the agency problem, can be studied from the externalconstraint mechanism of equity restriction. Institutional investors as an important forcein the capital market is constantly expanding, and have the ability and willingness toparticipate in corporate governance. This article will from this point of view, study oninstitutional investors that external forces for the inhibitory effect of private benefits ofcontrol by controlling shareholders.In this paper China2009-2011years in the Shenzhen A shares of listed companiesas the sample, to build a model, empirical analysis of private benefits of control rights and corporate performance, the relationship between institutional investors and theprivate benefits of control. The empirical results show that, the listing Corporationholding capital occupying behavior of big shareholders damage the interests of smallshareholders and reduce the performance of the company; and the proportion ofinstitutional investors holding and private benefits of control had a significant negativecorrelation, self interested behavior of controlling shareholder plays a restraining role.Conclusions drawn from the research in this paper not only enriches the principal-agenttheory, the theory of corporate governance, the protection of the interests of smallshareholders, but also understand the mediation mechanism between institutionalinvestors and corporate performance has a strong theoretical and practical significance.