The Influence Of The Nature Of Property Right And Ownership Concentration On Corporate Performance

Ownership structure of China’ enterprises generally have the feature of a high concentration of ownership and the dominance. Although the split share structure reform has achieved the same stock with the right in the stock market, highly concentrated ownership pattern has not been funda-mentally alleviated, and conflict of interests between major shareholders and minority shareholders is a major agency problems in China’ listed companies. So the analysis of the impact of the presence of large shareholders on the corporate performance is critical to China’s listed companies. Berle and Means considered companies with concentrated ownership has higher profitability and better market performance than those with widely-held firms, because excessive fragmentation of ownership will bring the "free-rider" problem, thus the company’s owner is difficult to effectively supervise management. While some degree of ownership concentration is beneficial for the shareholders to effectively supervise management. But serious conflict of interests exists between major shareholders and minority shareholders, major shareholders may sacrifice the interests of minority shareholders in order to pursue their own interests. Ownership concentration reduces the proxy conflict between external shareholders and management, also brings the proxy conflict between large shareholders and minority shareholders at the same time, therefore we need to weigh the benefits and costs of ownership concentration and examine its impact on company performance. Particularly, the special nature of property rights determined that the principal-agent problem of state-owned enterprises is more complex than the non-state-owned enterprises. There is a need to further study the nature of property rights’ influence on the relation between ownership concentration and corporate performance.This paper has six chapters, mainly studying the influence of the nature of property rights and ownership concentration on financial performance and market performance, and examining the nature of property rights’ ajustment effect to the relationship of ownership concentration and corporate performance. The empirical results show that the nature of state-owned property will reduce corporate performance. Ownership concentration is positively related to corporate performance. The nature of state-owned property will reduce ownership concentration’ positive effect on corporate performance. Lastly give suggestions according to the empirical conclusions.