Separation Of Rights And Interests Of Chinese Family Listed Companies

In modern times, the main problem of corporate governance is not the principal-agent problem between shareholders and management, but the controlling shareholders have the power to expropriate minority shareholders via the separation of the ultimate ownership and control in order to gain private benefits of control. The controlling shareholders usually organize the ultimate ownership and control in variety ways such as pyramid structure thereby affecting the efficiency of the company’s governance. Only reasonable structure of ultimate ownership and control could form a better corporate governance structure, thereby keeping the interests of the company from expropriating by controlling shareholders. These problems has been the focus of the research of scholars in recent years, such as the relationship between the ultimate ownership and the performance of company, and whether the separation of the ultimate ownership and control will result in the occupation of the interests of company.In this paper, we will use1024family companies listed in Shanghai and Shenzhen main board, the Shenzhen SME Board and GEM to the end of2011to conduct a empirical research, combined with the background of the development of the securities market in China, the family companies could be divided into two types:directly listed and indirectly listed. Empirical studies have shown that:(1) the relation between the ultimate ownership of the family business groups and the value of the company presents a U-shaped curve in directly listed firms, while the relation is a inverted U-shaped curve in indirectly listed firms;(2) unlike other scholars’ opinion, compared to indirectly listed firms, the controlling shareholders of family business groups in directly listed firms prefer to take advantage of excess control right to expropriate the interests of companies.