The Empirical Study On The Impact Of Ownership Structure On Profitability

Many people in China and foreign countries are committed to study the impactof the equity structure on the profitability. The ownership structure determines thedistribution of company ownership or control over remaining. The distribution ofthese rights has a significant impact on the interests of the equity holders andprofitability. A reasonable equity structure can not only through mechanisms such asincentives and supervision prompted managers to work hard, but aiso can preventshareholders from abusing their power or serving themselves at the expense of theinterests of other stakeholders and reduce agency costs, accordingly, improve thecompany’s long-term profitability, enhance the company’s core competitiveness, andcontribute to the survival, development and profitability of the company. For manyyears in the past China’s listed companies constantly improved the governancestructure, but still part of the equity structure of listed companies is not reasonable.Therefore, the study on the shareholding structure of listed companies on theprofitability is of great significance. The real estate industry has an important place inour country. It is one of the pillar industries of China’s national economy. It issignificant to GDP ratio and plays a very big role in boosting the national economy. Itis also the focus of attention. The study on the class structure and profitability of listedcompanies has great significance.This paper first introduces the research background, significance of this paper andsummarized research at home and abroad. Secondly, according to the theory on thebasis of the above research and ownership structure and profitability, combined withthe reality of China’s real estate listed companies, through the analysis of the structureand profitability of listed companies respectively, from the shareholding structure ofthe property, the proportion of the shareholding structure and other aspects, the use ofdescriptive statistics, correlation analysis, multiple regression analysis, finally drawthe following conclusions about the real estate listed companies:(1) The ratio of thestake of the largest shareholder and the second largest shareholder which representsthe degree of ownership balancing is not significant;(2) To Increase the proportion ofstate-owned shares, the proportion of tradable shares is not conducive to enhance thecompany’s profitability;(3) To increase the proportion of top ten shareholders isconducive to enhance the company’s profitability;(4) To reduce the ratio of the squareof the top ten shareholders and to improve the degree of ownership balancing, isconducive to enhance the company’s profitability. Finally, it is proposed to improvethe governance structure of listed companies by adjusting the ownership structure andimproving the profitability of the company’s policy recommendations. The recommendations are as follows:(1) Maintain an appropriate level of ownershipconcentration, and improve the level of ownership balancing;(2)Make an reduction ofstate-owned shares.The innovation of this paper are the following two:(1) Most of the previous studiesbased on the entire stock market listed companies as the research object, while thisarticle selects the real estate industry.(2) Past papers majority concerned about theimpact of ownership structure on corporate performance, while this study is on theimpact of ownership structure on profitability, so it limite the scope of the researchcompany performance.