Dynamic Adjustment And Efficiency Research Of The Proportion Of The Largest Shareholder Holding

Since the 1980s, the rapid development of SMEs has brought us a series of development opportunities. With the further expansion of the SME impact on China’s capital market, the majority of investors and company managers are becoming more and more attention to its corporate governance. Want to give full play to the corporate governance mechanism, the distribution of equity ownership structure and the adjustment is an important topic for the inevitable.On the basis of previous studies, this paper stands in the perspective of the largest shareholder, on the basic of trade-off theory, principal-agent theory, information asymmetric theory and control rights theory to study the dynamic adjustment and economic consequences of the largest shareholder of the companies listing on SME board. This paper is trying to depart from the restructuring of the proportion of the largest shareholder of SME in order to find some reform evidences that achieve equity diversification, improve the governance structure; provide reference and meaningful advice that can effectively improve the ownership structure of state-owned enterprises; provide evidence in order to accelerate the pace of reform of state-owned enterprises diversified equity and vigorously develop a mixed ownership economy; to encourage private capital to participate in the reform and restructuring of state-owned enterprises and give it a larger development space. Making the state-owned capital and private capital to achieve hybrid complementary advantages, "the chemical formula" organic integration, to optimize and improve its corporate governance, improve the operating performance of great significance.Firstly, this paper analysis the target proportion of the largest shareholder holding and its adjustment behaviour, retrospects the reviews and related articles on the relationship between the proportion of the largest shareholder holding and company performance. Then, before the models design and sample selection, we make a theoretical analysis and put forward the hypothesis of this paper. In the empirical part, it includes descriptive statistics, correlation test and regression analysis. At the end of this paper, according to the empirical results we concluded that the largest shareholder does exist dynamic adjustment behaviour, and this kind of dynamic adjustment behavior is conducive to improve the corporate performance.This paper selects the SME among 2010 to 2014 listed companies in ShenZhen as the sample.Based on the related theories, we study the largest shareholder whether there is a dynamic adjustment behavior through estimate the target proportion of the largest shareholder holding by different methods(One is based on the factors that effect the proportion of the largest shareholder holding, the other is the average of the proportion of the largest shareholder holding in the past three years),and it is proved that the adjustment of the largest shareholder has great influence on company performance. The results show that:(l)By the mean regression model of the proportion of the largest shareholder holding, the test results support the hypothesis that the proportion of the largest shareholder has mean reversion,indicates that the presence of the target proportion of the largest shareholder holding;(2)By standard partial adjustment model and the related regression estimation method, we found that the largest shareholder does exist adjustment behaviour, and the adjust behavior has a certain non symmetry in the different proportion of the largest shareholder holding.The largest shareholder with a large holding proportion, it will be reduced; on the contrary, the largest shareholder will increase holdings.At the same time, the speed of adjustment is different under the different econometric methods, which between 14.2% and 57.8%,moreover, the estimation value of the various methods has passed the significance test;(3)Through adjust efficiency model, the results show that when there exists adjustment behaviour of the largest shareholder, the impact of the proportion of the largest shareholder holding on the overall company performance significantly enhanced, that is helpful to improve company performance.Results of this paper provide a realistic evidence that the largest shareholder adjust its shareholding, while it has certain guiding value for shareholder to find the target level and how to adjust the actual level to its target state.In China, the largest shareholder of many listed companies has not take the target level as a concept in management from beginning to end. When the largest shareholder transfers its actual shareholding to the target level,they should find a balance between adjustment balance earnings and costs,build equity structure dynamic optimization mechanism thus to improve the company’s management level, constantly increase the value of the company.