Empirical Research On The Impact Of Foreign Strategic Investors On Corporation Governance For Listed Companies In China

To establish an effective corporate governance structure is the core of corporate restructuring, and also one of the popular research among the theoretical circle and the practical circle in recent years. Corporate restructuring has a special system background and policy environment in China. The majority of listing corporation reformed from the former state-owned enterprises. The phenomenon of state-owned shares becoming big alone would have brought serious owners-absence or property rights absence, and caused the insider control. In order to change this situation, it is particularly important to set up the diversified ownership structure and diversified forms of public ownership. When China launched non-tradable shares reform in2005, a wave of strategic investment upsurge swept across, the listing corporations participating in the share reform are, eyeing up foreign shores, looking for foreign strategic investors who have strength to join in, with its strong industry background, good corporate governance structure, and special resources in funds, technology, market, management and other aspects, to improve the listing corporation management structure and the corporate performance in China. In recent years, foreign investors seize the great opportunities and market potential brought by the rapid development of economy in China, actively to seek cooperation with the opened-up industry. When the listing cooperation were hunting for investment in overseas, the dispute also come in a throng. For example, the listing corporation in the sale of shares to foreign strategic investors, the bid is often lower than the market price, it leads people to question whether the listing corporation were in cheap situation. Some overseas investors choose to dispose it immediately in the lifting of the ban. It is not only against the significance of strategic investment, and also bring adverse effects to listing corporation. In addition, whether it will cause hidden trouble to safety, as foreign strategic investors invest to the industry related to the peoples’livelihood? Whether it will unfair phenomenon as the listing corporation open to foreign strategic investors rather than to domestic private capital? Then, whether or not it is reasonable to introduce foreign strategic investors? How effective it actually is to improve the management of listing corporation by introducing strategic investors?When foreign scholars are studying on introducing foreign investors to make strategic investment, mainly for the bank in some countries in the transition economics, they compare and analyze the effect of the introduction of strategic investors thoroughly. The domestic scholars have made some research on this problem, but most were based on the analysis of experience, and were concentrated in the banking industry. But there is almost no systematic research on the impact of strategic investment on the domestic listing Corporation governance. Based on the background, this paper attempts to the basic point of introduction foreign strategic investors, based on the influence mechanism to listing corporation governance in China, to analysis the influence of different proportions of ownership of foreign strategic investors to listing corporation governance in China. By using agent theory, equity theory, the effective supervision of hypothesis, to combine the theoretical analysis to empirical research, I get the following two hypothesis:(1) There is a positive correlation between corporate performance and ownership of listing corporation of foreign strategic investors;(2)There is a positive correlation between the governance performance of foreign strategic investors holding and the listing corporation. It chooses the rate of return on net assets(ROE) and the return on total assets(ROA) as a measure of the performance of corporate governance variables, ownership concentration, ownership balancing degree, firm size, financial leverage and growth ability are chosen as control variable. Adopting general regression process method and multiple linear regression method in the regression analysis, to study the relationship between the proportion of foreign strategic investors and the corporate performance, foreign strategic investors holding and listing corporation with the corporate performance. Through the empirical study, we found as shareholders equity participation of foreign strategic investors are positively correlated with corporate performance in listing corporation. At the same time, the foreign strategic investors as the controlling shareholder has a promoting effect. Thus, the paper verify the two assumptions for support on the basis of the theory and empirical data. Through the analysis of relevant factors, we find a certain significance and reference value to solve the existing process of introducing foreign strategic investors in China. And it provides feasible suggestions for our country to establish modern corporation system, to improve corporate governance and to optimize the allocation of resources. What’s more, it also offers a reference to avoid blinding investment and have reasonable financing.The thesis is composed of five parts. The first part is an introduction, in which it introduces research background, significance, clues, methods and a framework; The second part is a literature review, in which is a review focused on the structure of stock right, of the relationship between ownership concentration and the listing corporation governance performance, equity restriction with the listing corporation governance performance of related domestic and foreign researches. Then it summarized the main points of previous studies on the influence of general institutional investors and foreign strategic investors on corporate governance effects. Last, it points out the defects of present research and the problems need to be improved. At the same time, I put forward the innovation of this paper; The third part is a theoretical analysis on the impact of strategic investment on the domestic listing Corporation governance. In this part, it introduces the concepts, types and characteristics of foreign strategic investors, analysis the theory based on the function between institutional investors and the listing corporation governance performance, including agent theory, equity theory, the effective supervision of hypothesis. Based on this, it describes the mechanism of action of foreign strategic investment on the listing corporation management, and put forward the two theory hypothesis of progressive layers to lay the theoretical basis of the following empirical research; The forth part, which is the content of this paper, is an empirical analysis on the relationship between foreign strategic investors and listing Corporation management. This part constructs the model by combining with our country’s actual data, and has an empirical test of the above hypothesis, to conclude the main conclusions of this paper; The fifth part is the conclusion of the study, suggestions and the inadequate research. This part carries on the summary to the full text research and tries to put forward practical feasible suggestions. In addition, it listed the possible research insufficiency, pointed out the limitations of the research results.