Empirical Study On The Relationship Between Ownership Balance And Corporate Performance Based On Different Industries

Since the establishment of the modern joint-stock company, the so-called "two rights separation" theory in other words the separation between the capital ownership of the investors and capital management of the manager comes into being, which results in the necessary principal-agent relationship between shareholders and managers, and the contract relationship leads to the emergence of the problem of ownership structure. As the core of corporate governance, ownership structure is the direct reflection of the distribution of internal power in a company, which effects corporate performance through the design and implementation of the corporate governance mechanism indirectly. The pursuit of the maximization of enterprise value and the improvement of corporation performance, is based on improving the level of corporate governance, and find an appropriate ownership structure.Under the highly dispersed ownership structure, shareholding ratio is very small, they do not have enough motivation to supervise managers, shareholders "hitchhike" phenomenon is serious, which results in the "insider control" situation, and damages the interests of the shareholders. With the increase of the shareholding ratio, supervision and management benefits increases, most of the benefits can be shared by large shareholders, so shareholders have sufficient motivation to monitor managers, thereby reducing infringement of managers on interests of the shareholders. But in the highly concentrated equity cases, large shareholders may implement Tunneling Behavior by its control of the company, and then occupied the interests of the small shareholders. So, is there an ownership structure that, not only can resolve the conflict between shareholders and managers but also can effectively solve the contradiction between large shareholders and small shareholders? As the scholars at home and abroad exploring this kind of ownership structure, the ownership balance theory thus emerge as time requires. However, this will make us think:since different ownership structure has its own advantages and disadvantages, then ownership balance structure also has the same problem:on the one hand it can prevent the big shareholders from tunneling the company and protect the interests of small shareholders, on the other hand, does low decision-making efficiency caused by the collusions among large shareholders and disagreement among shareholders have a negative impact on the performance of the company? For different industries, how about their ownership balance level? In different industries, how does the ownership balance effect the performance of the company and to what extent does ownership balance effect the performance of the company? Should our country treat ownership balance structure as the development direction of ownership structure optimism of listed company? With these questions, we begin the research of this paper:This paper consists of six chapters, the main contents of each chapter are as follows:The first chapter is introduction, mainly introduces the research background, the significance of this study, and puts forward the research question of this paper, and then describes the research ideas and research methods.The second chapter is literature review, which reviews the empirical study results on foreign, domestic scholars on the ownership concentration, the relationships between ownership balance and company performance, sums up the conclusions of the model and the research results, points out the shortcomings and limitations of the existing research results, and puts forward the purpose of this study, and lays a theoretical foundation a deep analysis for the following.The third chapter is the analysis of ownership structure and corporate performance theory. Through a review of the principal agent theory, asymmetric information theory and control right theory, analysis of the basic theory of the ownership concentration, we lead to basic theoretical analysis on the relationships among ownership structure concentration, ownership balance and firm performance relationship, sum up the mechanism of corporate ownership structure, paving the way for the following research hypothesis.The fourth chapter is study design on the ownership balance and performance of the company. Through the analysis and summation of the basic theory, combining the actual conditions of our country, we put forward the research hypothesis, and on this basis, the regression model was established, and then the data sources, sample selection and research variables are described.The fifth chapter is the empirical study of ownership balance and company performance. This chapter firstly has a descriptive statistical analysis on the data of the three years from2010to2012, and then put it into the regression model to test the hypothesis, then the overall return to the Chinese listed Corporation ownership and corporation performance is analyzed, finally have a detailed analysis on the market competition degree classification of twelve industry’s relationships between the company performance results and ownership balance.The sixth chapter is the conclusion of the study and suggestions. Firstly, according to the analysis of the previous empirical results, combining with the actual situation in china draws the conclusion of this study:(l)Our country is in the transitional period of the market economy currently, market economy system is in the reforming construction, the stock market supervision still need to be improved, the related laws and regulations still need to be better gradually, the listed corporation governance mechanisms also need be to improved, based on China’s basic national conditions, increasing the concentration of ownership of listing Corporation in China properly, is conducive to the improvement of company performance.(2)Ownership balance degree and the company performance was inverted "U" type relationship, based on the fact that the ownership balance degree of China’s listed Corporation at present is low, improving the shareholding ratio of other shareholders to form the proper ownership balance structure helps enhance company performance.(3)The effect of ownership balance on corporate performance shows the industry difference. For the companies such as the one beneficial to the people’s livelihood, the one with weak competitiveness, the one with More monopoly component, the industry which is protected by our country, the average ownership balance degree is relatively low, but don’t have a negative impact on corporate performance, in contrast, it is conducive to the improvement of company performance and we can keep the layout of the existing ownership structure. But for some competitive industry, only when the ownership balance degree is very high, it can have a positive impact on corporate performance and the efficiency of corporate governance, so we should reduce the shareholding ratio of the largest shareholder, and improve the ratio of several other big shareholders, forming competing ownership structure among big shareholders, reducing the embezzlement major shareholder have on the small shareholders, protecting the interests of small investors, to improve the performance of listed companies. Moreover, aiming at the problems presented from the empirical research results on our country’s listed corporation, we put forward the policy advice that improve the ownership structure based on our country’s industry condition, and improve the corporate performance.The main contribution of this paper is that, now it’s inconclusive for research on the relationship between ownership balance and company performance, and is still on the stage of contention of hundreds of schools of thought, most of which is the study on the whole china’s listed Corporation or single industry. This paper based on the situation of our country, research on the relationship between ownership balance and company performance from the whole industry, due to the particularity of financial, insurance industry we ignore them temporarily, by means of regression test of the remaining twelve industry data and calculates the optimal interval ownership balance in different industries, according to the characteristics of different industries, according to the degree of market competition to have a classification analysis, so as to optimize the ownership structure of different industries to provide certain basis, to improve the level of management of listed corporation and has important practical significance for the healthy development of China’s securities market.The lack of this study is that, although this article concerned the relationship among large shareholder or concert party relationship, in other words the situation which several shareholders at the same company may actually be controlled by the same person, but this paper does not consider the possibility that internal small shareholders may unite to form the consistent party, if the small shareholders with stockholding radio lower than three percent unite to acting in concert with shareholding ratio more than ten percent, according to China’s "company law" provisions of article101st,they already meet the conditions to formed the interim shareholders’ general meeting, which can contain major shareholders to some degree.