An Empirical Analysis Of The Relationship Between Ownership Structure And Corporate Performance Of Listed Companies In China’s Real Estate Industry

BACKGROUNDAs is known to all, our country social economy have certain particularity, capital market is still immature. It leads to a series of thorny issues, such as the serious insider control, stock price manipulation, and unclear property rights, etc. This is a part of the problem of corporate governance. National regulators are thinking to guide the further development of capital market, but the underlying problem is still failed to get completely solved. How to establish effective corporate governance structure has become the hot topic in research. Ownership structure as the decisive factor of corporate governance, the reasonable arrangement of equity ownership structure can perfect the governance structure of listed companies, thus improve the whole operation of listed companies. In April2005, the equity division reform started. The non-tradable shares changed into tradable shares, making major change in the ownership structure of listed companies in our country. Although most listed companies in our country finished the reform, but still remained some problems. This prompted us to think what kind of ownership structure is conducive to the healthy development of listed companies and the improvement of corporate performance.Ownership structure is different with different industry, and the relationship between ownership structure and corporate performance also will be different. As one of those industries, the real estate industry is the contribution of GDP, and is the pillar of the national economy in our country. The development of the real estate industry can drive dozens or even hundreds of industry, it has important role on the economic development of our country. At the same time, the country will have great influence on the real estate industry through macro-control. It makes that the relationship between ownership structure and corporate performance of listed companies is different from other industries, which is the research problem in this paper.PURPOSEIn this paper, we mainly answer three questions. The first is what characteristics and problems ownership structure in listed companies in China’s real estate industry has. The second is what kind of relationship between ownership structure and corporate performance listed companies in China’s real estate industry has. The third is how to optimize ownership structure of listed companies in China’s real estate industry so as to improve company operating performance. A reasonable ownership structure is beneficial to the company through constraint incentive mechanism to protect the interests of all stakeholders, to improve the company’s operating performance and the core competitiveness. In this paper, it has certain theoretical significance and practical significance to study the correlation between ownership structure and corporate performance in China’s real estate industry.MAIN CONTENT AND VIEWThis paper is divided into five parts:Chapter Ⅰ is introduction, which tells four issues. The first issue tells the background and significance of the paper. The second one tells the research train of thought, technical route and research content. The third one tells the research methodology. The last issue tells the contribution and shortcomings of the article. The main purpose of this chapter is to enable the reader to the thesis writing background and the overall framework, and to prepare for the below.Chapter Ⅱ is literature review. It has many research results about the relationship between ownership structure and corporate performance both at home and abroad. This chapter carries on the literature review mainly both at home and abroad. Foreign scholars have long studied the research of relationship between ownership structure and corporate performance, and formed many valuable empirical conclusions. This article mainly summarizes the foreign literature from the perspectives of ownership concentration. Considering China’s specific environment, this article will summarize the literature at home from the perspectives of equity attributes and ownership concentration. Due to the different environment, the selection of samples, the conclusion is not consistent. The last section in this chapter points out that the existing performance measurement indicators in the study have differences, and most empirical analysis mainly focused on linear relation, the nonlinear relationship is less. This also puts forward the direction of the research of this paper.Chapter Ⅲ is the theoretical analysis of ownership structure and corporate performance of listed companies. This chapter is mainly on the theory of ownership structure and corporate performance, theoretically preparing for the following empirical analysis part. First of all, this paper expounds the theoretical basis between ownership structure and corporate performance, mainly based on Property Rights theory, Principal-Agent theory, and Asymmetric Information theory. Second, this article will study the mechanism of the ownership structure affects corporate performance from the perspectives of the equity attributes and ownership concentration. Finally, this article analyzes present situation and main problems of the ownership structure and corporate performance of listed companies in China’s real estate industry.Chapter Ⅳ is the empirical analysis part. This article puts forward six research hypotheses in section1. The hypothesis1a is that the proportion of state-owned shares is a negative correlation with corporate performance; the hypothesis lb is that the relationship between the proportion of state-owned shares and corporate performance is positive. The second hypothesis is that the relationship between the legal person share proportion and corporate performance is positive. The third hypothesis is that the current ratio has a positive correlation with corporate performance. The forth hypothesis is that the relationship of the first big shareholder’s shareholding and corporate performance presents an inverted u-shaped curve relationship. The fifth hypothesis is that the relationship of the sum of the squares of the other top five shareholders’shareholding and corporate performance also presents an inverted u-shaped curve relationship. The sixth hypothesis is that the proportion of the first largest shareholder and the second largest shareholder shareholding ratio and corporate performance has negative relationship. In section2, this part tells us the sample selection, the variable set and model establish. The third section is the empirical process and result analysis part. Chapter V tells us the research conclusions, policy recommendations, and research prospect. Combining with the above norms and empirical study, this chapter summarizes the conclusion of this article, and puts forward relevant policy recommendations. Finally, the future research prospect is put forward.CONTRIBUTIONSContributions of this paper mainly have the following several aspects:First of all, this article does analysis from the comprehensive perspectives of equity attributes and ownership concentration (include equity balance degree) of the influence of ownership structure on corporate performance.Secondly, this article selects the data from2008to2011for empirical analysis, which can reduce the influence of time factor and chooses the representative of the real estate industry, avoiding the industry factor’s influence on the conclusion.Thirdly, in the existing literature, most of the empirical analysis focused on the linear relationship, the nonlinear relationship between research is less. This paper studies the nonlinear relation between ownership concentration and corporate performance, and enriched the literature.