Research On The Relationship Between Equity Balance Degree, Internal Control And Corporate Performance

Academia pay more and more attention to researching the relationship between equity balance degree,internal control and corporate performance.Many scholars believe that the basis of the corporate governance is ownership structure,and its measure is equity balance degree or ownership concentration.Internal control is reflected in the company’s governance environment, and a perfect internal control system can provide reasonable assurance for the company’s operational goals.In this context, the academic are increasingly focusing on internal control researches.However, the emergence of a number of listed scandals, such as Enron event, the Shanghai pharmaceutical door and other events, has exposed a common drawbacks:internal control has not been effectively implemented.In this new market background, through theoretical research and empirical research, we explore the impact of equity balance, internal control on corporate performance, and propose the policy recommendations to improve the company’s performance,which is very necessary.In recent years, with the rapid development of large-scale infrastructure construction, China’s construction industry is developing rapidly,which plays an important role in pro moting the national economic development and accelerating the process of urbanization. Construction listing Corporation is the backbone of the entire construction industry mar ket development.Therefore, we make construction listing Corporation as the research sa mple and study the influence of the equity balance and the internal control on the compa ny performance, which has a typical significance.In this paper, we select 5 years of construction of the listing Corporation as the research sample, and study the relationship between the equity balance, internal control and corporate performance.Firstly, we reviews the relevant literature, and then combined with the relevant theory, that is the principal-agent theory, signal transmission theory and incomplete contract theory. Then we explore the relationship between equity balance, internal control and corporate performance and on the bases,we put forward the research hypothesis.Secondly, according to the research, we choose the variables of this paper, and constructed the model. Finally, we analyze the empirical test results.The empirical results show that the higher the equity balance degree, the better the company’s performance; the more effective the internal control, the better the performance of the company; and if the equity balance degree and the internal control can be controlled simultaneously, the performance of the company is more effective.Based on the original model, this paper makes a robust test, and the test results are consistent with the original hypothesis. According to the above results, we provide some suggestions:we should establish equity balance mechanism and optimize the company’s ownership structure; and improve the internal control system and improve the quality of internal control. At last, we put forward the research questions of this paper.