A Research On The Relationship Of The Ownership Structure And Enterprise Performance Of Chinese Family Listed Companies

Family enterprise has played an increasingly important role in developing economic and stabilizing social order. Most family enterprises plan to go public or have been listed for financing. More and more family enterprises have been successfully listed while restriction about family firm going public from laws and regulations is no longer strict. There are so many deficiencies in corporate governance of family firm, some of them are generality, others are speciality. The writer believes that it is the ultimate controller of listed companies owns exorbitant control power that causes all those deficiencies. The control power of ultimate controller of listed companies is so strong that it could separate the cash flow right and vote right to create conditions to get private benefit. Meanwhile the internal restrictive mechanism will be out of order, talent introduction will be hard, the management layer will not be motivated enough. The ultimate controller has strong power shows some positive aspects as well, such as improving the efficiency of decision making.Theoretical analysis shows that the power of ultimate controller is too strong to unbalance the internal power configuration; therefore equity concentration goes against of formation mechanism of checks and balances. The strong power and desire of ultimate controller supervisory of takeover market, the ultimate controller may distribute too much cash dividends. The company operation relies on the controlling family because the ultimate controller manages the firm by himself and family members hold positions of management layer and board of directors. It is difficult for professional agents outside of the controlling family to gain the trust, and their working enthusiasm will be affected.Study on corporate governance pattern of family listed firm indicate that unity of ownership and management, paternalistic leadership, control power transmission is confined in the family and shortage of fund are the main characters of family listed firm. The advantages of the family governs the pattern are the operation target is explicit and unified, managers agency cost is lower, strong leadership and execution; the disadvantages are concentration of power, internal restrictive mechanism is not consummate, operation risk is higher and cronyism.Statistics about related party transaction and occupation of fund in family listed firms indicates that, with the enhancement of the control power, the ultimate controller will reduce "tunneling", the financial performance and shareholder profitability will be advanced while Tuobin’Q will reduce, which represent the corporate value.