The Influence Of Institutional Shareholders To Related Party Assets Transactions

Assets transaction plays an important role in optimizing the enterprise group’s internal resources allocation. However, in recent years, the assets transaction between related parties is to become an important means for dealing with financial crisis or transferring the company wealth. In the restructuring process, related parties in the controlling of the biggest shareholder, change the high quality assets for bad assets, which bring huge losses for the listed company and other shareholders, and then increase the capital market risks. The controlling shareholders tunneling the listed company through the related party assets transaction has become the hot topic of corporate governance.How to constraint and balance the behavior of controlling shareholders, and protect the interests of small and medium shareholders? Owner right checks and balances is undoubtedly an effective method. Institutional shareholders are expected to become an important force in corporate governance, because they have information advantages and professional technology to make it different from the small shareholders. At present, China’s encouragement policy for institutional shareholders has got very good effect. The shares holding by Institutional shareholders accounted for a big proportion of the entire capital market, but we should consider that if the expanding of institutional shareholders is in favor of the capital market development. There are many researches and ideas of this aspect, but they are generally qualitative research, not quantitative research. Referencing domestic and international research literature, this paper focused on the related party assets transaction, analyzed the factor that affect the income of institutional shareholders and controlling shareholders, and given respectively their objective function, established the game model in related party assets transaction, revealed the checks and conspiracy relationship of institutional shareholders and the controlling shareholders in assets transaction. On the basis of theoretical analysis, this paper designed respectively empirical research for the price and performance of related party assets transaction, in order to analyze the effect of institutional shareholders in related party assets transaction. In the restructuring process analysis, using the premium rate as the dependent variable, we found a nonlinear relation between the rights separation of controlling shareholders, equity percentage of institutional shareholders and the dependent variable. This confirmed that if equity percentage of institutional shareholders reaches a certain threshold, they can play its governance effect. For the premium rate, the rights separation between controlling shareholders and institutions shareholding have an alternative relationship. In the restructuring performance research, this paper adopts event study method. Using the capital market abnormal returns as the dependent variable, we found that restructuring premium rate has important influence in abnormal returns, and confirmed that the shareholding proportion of institutional shareholder have positive relationship with abnormal returns. It means that has the stable role for capital market.