Equity Heterogeneity, Accounting Behavior And Economic Consequences

After the reform of shareholder structure of listed companies, more diversified shareholders rush into the capital market. Varied background, different characters, abundant resources of the shareholders have come into Large Shareholders’ Heterogeneity. Company insider’s advantage of information has been fade out. Instead, majority stockholders dominance this advantage. Therefore, if the majority stockholders use the power in hand to obtain excess returns instead of ignoring companies’ development; if the large shareholder heterogeneity conduct the variance of financial behavior. If this variance does exist, which type of shareholder is more focus on the enterprise’s expansion? All this issue matters investment decisions of small investors.This thesis employs Chongqing Brewery Corp. as a study case to analysis the issue from the aspect of large shareholders’ heterogeneity. The conclusion shows that mild type of shareholders, which involve state-owned shareholders, is more likely to utilize signal transmission to realize private benefits of its rights, and also has more potential to conduct disorder financial behavior. Relatively, the positive type of large shareholders which exchange their control right with higher costs has more potential to prove company’s profit from long respect. More steady and more sustainable financial behavior is been taken as well. The conclusion shows that the positive type of large shareholders conduce to enterprise’s expansion. A suggestion is given to the middle-small size investors, that more attention and patience should been assigned to the positive type of large shareholders instead of the mild type of shareholders.