The Research On The Relationship Between Ownership Structure And Corporate Performance Of Emerging Industry Based On DEA Model

After the financial crisis, the global economy is in a sluggish condition. Every country has issued a new round of industry planning policy to accelerate industrial upgrading and to get rid of the low economic growth situation caused by the financial crisis. Under this circumstance, China has determined seven emerging industries as strategic layout, aiming at promoting industrial upgrading and accelerating economic reconstruction. After several years of development, China’s strategic emerging industries have achieved abundant accomplishment in both industry scale and technology research. However, there are still some problems exposed during the industrial development, such as overdependence on foreign markets, severe problems of low-level repeated construction and etc. In such a situation, this paper does a research on the relationship between ownership structure and corporate performance in strategic emerging industries.This paper has reviewed the related literatures, pinpointed the current research results and the shortcomings that remain to be discussed. Scholars at home and abroad have done many researches on the relationship between ownership structure and corporate performance for certain markets or for certain industries. The multiple linear regression with a single performance indicator is widely used as a discussion methodology to do empirical tests. However, there is no consistent conclusion concerning the research results and methodologies. In this paper, some hypotheses will be proposed that based on economic theories after the review of related literatures and DEA model will be used to measure the operating performance in emerging industry companies. The advantage of this model is that a model with multiple inputs and outputs can measure the performance in multiple dimensions, run a multiple linear regression on variable intercept panel data under fixed effect to verify the theories and finally propose the conclusion and recommendations. The study finds that the average operating performance of China’s strategic emerging industry companies has presented an increase trend in slow pace in the recent five years. In terms of equity concentration, the lack of checks and balances results in high equity concentration in strategic emerging industries. With regard to the indicators that measure the effect of equity concentration on corporate performance, the relationship between different indicators and corporate performance is different, which shows the effect of equity concentration on corporate performance is complicated. The effect of equity property on corporate performance can be shown as follows: institutional ownership has a positive effect on corporate performance, state-owned ownership (including the state ownership and state enterprises’ ownership) have no significant correlation with corporate performance and management ownership has a positive effect on corporate performance.The paper argues that in terms of ownership structure, due to the high risk of emerging industries, we should introduce strategic investors, widen the method of equity financing, increase management ownership, avoid the situation where the interest conflicts impair corporate performance, keep moderate equity concentration and strengthen the mutual supervision among shareholders. In terms of industry development, China’s strategic emerging industries should adjust measures to local conditions, make use of comparative advantage to develop regional advantage industries, set special funds to encourage scientific research and innovation, strengthen the cooperation between enterprises and universities, realize industrialization application of technology innovation, fully play the market’s leading role, regard the policy as a guidance and establish a dynamic emerging industry market.