A Comparative Study Of Chinese Listed Company’s Two Types Of Treatment Costs Under The Control Of Majority Shareholder

As the representative of the outstanding enterprises， listed companiespowerfully promoted the rapid development of China’s market economy. But it isundeniable， listed companies also exist many problems in its development processwhich restricts their development seriously. The imperfect corporate governancemechanism leads to two types of treatment costs. One exits in the relationshipbetween shareholders and managers; the other exits in the relationship betweencontrolling shareholders and small shareholders. Therefore it is necessary to constructa reasonable corporate governance mechanism to reduce the two types of treatmentcosts. Most of the current study take the listed company as a whole and seldom makethe comparative study between state-owned and private listed companies. It will makeresearch bias. So this paper makes a comparative study between the state-owned andnon-state-owned listed companies on the basis of the comprehensive study.This paper selects the2003-2011data of listed companies in Shanghai andShenzhen A shares to verify the study hypothesis.The main conclusion are as follows:The state-owned companies has the most serious the first-one treatment costs. Themost serious treatment cost in private listed companies is the second one; Ownershipconcentration ratio shows a negative correlation with first treatment costs， a positivecorrelation with the second treatment costs in the whole sample and classificationsamples. On the whole， on-state-owned listed companies should pay more attentionto the role ownership concentration played. Two types of company should keepownership concentration at a moderate range to make the two types of treatment costsat a lower level; Check-and-balance of stock ownership has a negative correlationwith the two types of treatment costs in the whole and classification samples.Non-state-owned listed companies should strengthen the role of Check-and-balance ofstock ownership. Overall， the board does not play the role of inhibition of two typesof treatment costs. But the state-owned listed companies should focus on the role ofindependent directors; executives’ holdings could reduce the first-one treatment costsof state-owned listed companies， but the correlation with the second treatment costsis not significant in the whole sample and classification samples. Debt financing andtwo types of treatment costs are all positively correlate， but the impact ofstate-owned list companies is greater. So state-owned listed companies should pay more attention to issues arising from debt financing.Finally， the paper raises some relevant recommendations to the problems foundin the study and provides reference for reducing the two types of treatm ent costs.