The Inhibition Effect Research On IRM To The Minority Shareholders’Interests Damage

Because of the poor risk tolerance, weak self-protection, high prosecution costs, lacking of voice and the other features, the minority shareholders are in a disadvantaged position naturally in the capital market. In fact, the protection of minority shareholders’interests is very important in maintaining the confidence of the whole capital market. However, the reason why the minority shareholders’ interests is damaged, some experts and scholars from the mainland China and foreign land have done some related research.In terms of the current situation of the damage, it is mainly because of the defects of governance structure in the listed company, institutional investor speculation and lacking of legal regulation. This paper is based on the perspective of the minority shareholders expropriated by the major shareholder to start the research.In the company’s power configuration, as the disadvantaged groups long time, the rights of the minority shareholders are often abused by the major shareholders, and thus the minority shareholders’ interests is damaged. Especially in the principle of most capital, the shareholders who own more capital could control the board of directors, and affect the decision, making use of their own advantage. The author reviews a few related documents, and finds, in order to strengthen the protection of the minority shareholders’interests, besides relying on the laws and regulations of the macro mechanism, The Investor Relations Management-IRM, as microscopic mechanism introduced in the corporate governance structure, could inhibit the damage of the minority shareholders’interests.Investor Relations Management is an activity about information revealing. It can make the minority shareholders understand and recognize the listed company more. And also it can improve the corporate governance efficiency. This paper is intending to test the relationship between IRM and the damaged extent of the minority shareholders’ interestsThis paper is divided into six chapters, each chapter follows: Chapter1ExordiumThis chapter firstly introduces its background and significance, then the framework of research and ideas are described. This paper is mainly comment on the adverse effect between the Investor relations management and the minority shareholders’ interests damage. The ideas of this paper will firstly review a few related documents from the mainland China and foreign land, then discusses the theoretical basis of this research, analyzes the theory,puts forward the hypothesis, and does the empirical test. Finally it draws conclusions based on the hypothesis.Chapter2Literature ReviewThis chapter firstly elaborates the concepts about the minority shareholders, the major shareholders and the Investor relations management in detail. And then it reviews and cards the related documents from the mainland China and foreign land, about the Investor relations management and the minority shareholders expropriated by the major shareholder respectively. It makes a comment on the Investor relations management and the minority shareholders’interests damage finally.Chapter3Theoretical Basis and HypothesisThis chapter firstly reviews the related theories between the Investor relations management and the corporate governance which have been occurred in the previous documents. And then it puts forward two theories:The double principal-agent theory and the asymmetric information theory. The next the author introduces them in detail. And finally it puts forward the corresponding hypothesis based on them.Chapter4Variables, Data and ModelsThis chapter firstly describes the variables:the extent of minority shareholders’interests damage, the Investor relations management and the control variables. Then, this chapter describes the sample and data processing in detail. Finally, in order to test the hypothesis, it constructs the research models.Chapter5Empirical ResultsThis chapter firstly does an empirical test about the relationships among the equity concentration, Big shareholders checks and balances and the Investor relation management, using descriptive statistics, correlation and regression analysis. It finds the following results:the equity concentration can intensify the minority shareholders’interests damaged extent; Big shareholders can checks and balances the largest shareholders, on damaging the minority shareholders’interests; the Investor relations management can restrain the damaged extent of the minority shareholders’ interests and so on.Chapter6Conclusions, Ideas for Improvement and so onFirstly, based on the above-mentioned theoretical analysis and empirical results, the chapter reaches the final conclusions:(1) The higher the proportion of the largest shareholder hold, the higher extent of damage to the interests of minority shareholders suffer;(2)The other large shareholders can check and balance the agent behavior of the largest shareholder, but the capacity is limited;(3) The higher level of the listed company’s investor relation management, the lower the degree of damage to the interests of minority shareholders, and it can effectively restrict the agent behavior of large shareholders, and also can substitute the capacity of checking and balancing of the other large shareholders.Secondly, based on the final conclusion, this chapter makes the policy recommendations about three aspects:regulatory authorities, listed Companies and investors themselves. Finally, it makes ideas for further improvements based on the limitation of this paper.The main Innovations of this paper are:(1) The research perspective is relatively new. In theory, the key purpose of the investor relations management is to protect the interests of minority shareholders. But there is little empirical evidence on the relationship between them.(2) The construction of investor relations management index system is relatively new. This paper is based on the contents and efficiency of information revealing by the listed companies. Combined with the achievements of the former, the author builds39indexes through selecting the basic information, financial information, non-financial information, interactive investor relations and information disclosure. And it establish computational model balancing the level of IRM.This paper has made some expected results, but because of the limitations in obtaining information and the shortage of research capacity, this paper still has a lot of deficiencies. Such as selecting a single year in the sample data, investor relations management index system is not enough comprehensive, etc. These issues will do a future research to improve the result.