Empirical Study On The Relationship Between Ownership Concentration, Equity Balance Degree And Corporate Performance

Abstract:The core content of modern enterprise system is to establish a perfect corporate governance mechanism. Under the condition of the separation of ownership and management right, the so-called perfect corporate governance mechanism must be able to coordinate the relationship between the shareholders and other stakeholders to enhance improve corporate performance while forming an effective balance between the owner and operator. As the basis of the corporate governance structure, the equity structure has always been a hot topic in the field of corporate governance research. The study shows that ownership structure is reasonable or not affects the perfection of corporate governance structure, and then affects the improvement of corporate performance.As a representative industry in consumer goods industry, the wine industry plays an important role in promoting China’s economic development. With the increasing development of globalization and the rapid development of the domestic economy, the wine industry is facing great pressure and challenge. Especially after2009, the rise of raw material prices, the request of energy conservation and emission reduction, and a series of policy restrict aiming at the use of alcohol consumption have led to a increasing cost and a falling demand for liquor product, which is a huge challenge for the wine industry. In this situation, how to perfect the present corporate governance structure and improve the corporate performance becomes very important. With the method of normative analysis and empirical analysis, this paper selects the listed companies of the wine industry in our country as the research object, based on the relevant data published by the company’s annual reports, to research the relationship between ownership concentration, equity balance degree and corporate performance of listed companies of the wine industry.This paper summarizes a series of relevant research literature at home and abroad, and researches how the ownership concentration and equity balance degree impact on the corporate performance by the method of normative analysis, based on these theories such as separation of two rights theory, principal-agent theory and property rights theory. Then this paper selects the data of annual reports published by twenty-three listed companies of the wine industry from2009to2012as the research sample, and builds an evaluation system of corporate performance which covers twelve financial indicators in terms of the debt paying ability, operation ability, profit ability and development ability by using the method of factor analysis. The comprehensive score of performance calculated is used as the dependent variable, ownership concentration and equity balance degree as the independent variables with the company size and financial leverage as the control variables. Then by building multivariate regression models and under the help of SPSS16.0statistical analysis software, this paper researches the relationship between ownership concentration, equity balance degree and corporate performance using the method of empirical analysis. The study results show that the equity of listed companies of China’s wine industry is highly concentrated in the top five shareholders and relatively concentrated in the first majority shareholder, and presents a downward trend; There is a U-shaped curve relationship positively between the first majority shareholder’s stake and corporate performance; The top five shareholders’stake, the top10shareholders’stake and HI index have a positive relationship with corporate performance; Equity balance degree has a positively U-shaped curve relationship with corporate performance.At last, combined with the empirical research conclusions, this paper proposes some countermeasures and suggestions for optimizing the equity structure of listed companies of the wine industry in our country, enhancing the governance efficiency, and improving the company’s overall operating performance:Firstly, keep a moderate shareholding concentration; Secondly, reduce the gap of proportion of shareholding between the large shareholders and establish an effective equity balance mechanism; Lastly, cultivate a professional manager market.