A Study On Tunneling Of Ultimate Controlling Shareholder Under Pyramid Holding Structure

Under the background of Chinese emerging capital market, the pyramid shareholding structure is a hot issue in the field of corporate governance research. The ultimate controlling shareholders of listed companies generally use pyramid shareholding structure to control the listed companies indirectly, and behavior of ultimate controlling shareholders of listed companies has produced important influences on governance practices. The characteristics of ultimate control right, cash flow right, the separation of ultimate control right from cash flow right, and hierarchical structure make the private benefits of ultimate controlling shareholder different from overall interests of listed companies and influence the behavioral orientation of ultimate controlling shareholder and have significant governance effects. Because of the complexity and imperceptibility of the control chains in the pyramid holding structure, the behaviors of ultimate controlling shareholder are invisible, which further aggravates the tunneling of ultimate controlling shareholder under high concentration of ownership structure. Based on the this problem, it is feasible and urgent to study on tunneling of ultimate controlling shareholder under pyramid structure in theory and practice, and it has a significant meaning of guidance to consummate the supervision mechanism for listed companies, improve the efficiency of corporate governance and deepen the reform of state-owned enterprises.Taking the manufacturing listing companies as the object of study, the dissertation studies the impacts of characteristics of pyramid holding structure on difference of tunneling of ultimate controlling shareholder by establishing logical links among characteristics of pyramid structure and tunneling of ultimate controlling shareholder. The research hypotheses are proposed by theoretical analysis. Furthermore, a corresponding theoretical model is constructed and data model is established to have empirical analyses by the data of Chinese manufacturing listed companies from2011to2013. On the foundation of the empirical results, the dissertation puts forward policy suggestions finally.The dissertation extends the range of pyramid control structure to cash flow right, ultimate control right, the separation of ultimate control right from cash flow right and hierarchical structure. The empirical results indicate that difference of tunneling of ultimate controlling shareholder is affected by the level of ultimate control right, cash flow right and separation of ultimate control right from cash flow right significantly. Moreover, For different nature of property rights, the hierarchical structure has the different effect on the ultimate controlling shareholders’behavior, for the listed companies in the ultimate control of government, extend of the hierarchy of the pyramid slows down the tunneling of ultimate controlling shareholders, it’s significant negative correlation, while for non-state ultimate control listed companies, it’s significant positive correlation between the two.