An Analysis On The Influence Factors Of Tunneling By Controlling Shareholders In China’s Listed Companies

The tunneling of controlling shareholders,means that controlling shareholderssiphon resources out of firms by many forms to increase their own wealth,while othershareholders do not benefit from this behavior,and they may even suffer interestsloss.Due to institutional factors,the ownership concentration of listed companies inChina is very high.High ownership concentration,coupled with imperfect corporateinternal and external governance mechanism，seducing prevalent tunneling，resulting inexpropriation of minority shareholders by controlling shareholders.After the reform ofshareholder structure of listed companies,all shares in the security market aretradable,which mitigating conflicts of interests between controlling shareholders andminority shareholders.To some extent,the tunneling motive of controlling shareholdersmay be constrained.However,the situation of high ownership concentration,informationasymmetry between the majority and minority shareholders,and imperfect legalprotection system still exist.As a matter of fact,compared to other shareholds,controllingshareholders still have information advantage of the corportes’ operating and financialstatus,and they can still control the firms’ major decision-making.Therefore,the reformof shareholder structure of listed companies can not eliminate tunneling.Controllingshareholders will tunnel the firm as long as they can gain more interests.Therefore,theagency problem between controlling shareholders and minority shareholders stillexists.The paper is divided into six parts, the first part is an introduction. The part of thefirst expounded the research background and explains the research significance, pointedout that the split share structure reform the controlling shareholder tunneling behavior，still exists, and M&A activity in the ascendant in the Chinese capital market is one ofthe primary means of tunneling. visits mergers and acquisitions has importantinfluencing factors on the inhibition of hollowed nature acquisitions, maintenance of thedevelopment of the capital market, and then were two issues of research ideas andresearch methods and thesis framework article described last brief introduction to thisresearch innovation and insufficient Office. The second part of the literature review. Thepart first foreign Literature and domestic literature introduced the domestic andinternational research on the impact factors of the hollowed out mergers andacquisitions, corporate governance mechanism with hollowed relationship is relativelymature, other factors are still in the continuous research, the last of the domestic outside the literature Commentary. The third part is the basis of the theory of the factorscontrolling shareholder emptied M&Behavior. The first part of a brief description ofthe definition of the hollowed out and emptied mergers and acquisitions as well as thecontrolling shareholder, and then describes the principal-agent theory, the agencyproblem in our country is mainly reflected in the agency problem between thecontrolling shareholder and minority investors; Finally, M&A in the interests of thecontrolling shareholder and hollowed out mergers and acquisitions and the controllingshareholder interests. The fourth part is the theory of the controlling shareholderemptied acquisition activities influencing factors analysis and hypotheses. The part ofthe first two angles from corporate governance factors and the company’s financialcharacteristics of the impact of the hollowed out mergers and acquisitions of thecontrolling shareholder, theoretical analysis, and finally our assumptions made on thebasis of theoretical analysis. The part of first sample selected data sources, as well asvariable design described, then the use of descriptive statistics, correlation analysis,multiple regression analysis method to analyze the controlling shareholder of the splitshare structure reform of listed companies hollowed behavior occurs the main factors,the results are in line with the assumptions of this study, and test the robustness of theresults of this paper regression problems.This paper argues that，the company should take good advantage of the reform ofnon-tradable shares to optimize its ownership structure; simplify the complex pyramidownership structure， reducing the deviation between the control and cash flow right．In addition， the internal audit department and outside investors can identify tunnelingby observing the financial ratios such as the revenue growth ratio and debt ratio of thecompany．Externally，relevant departments of the state should make the law practical byquantifing the penalties for illegal behavior against corporate governance. This article ishelpful for regulating the tunneling behavior of the controlling shareholders andprotecting the interests of other stakeholders，finally resulting in effective operation ofthe capital market.