The Study On The Correlation Of The Listed Companies’ Ownership Structure And The Corporate Value

With the development of economic globalization, domestic and foreign companies choose the internationalization as a business development strategy in order to better participate in international economic cooperation and competition. Stock is an important part of cross-border capital flows and the stock liquidity is in the international capital markets daily increasing. For China, the emerging economies, with the further openness of the stock market, growing number of companies issue shares and are listed on overseas stock market. Cross-listing means that the same company listed shares in two or more stock exchanges, the same company are usually listed in two different countries or regions. Meanwhile, the efficiency and the completeness of the company’s corporate management structure ensure the standardized operation and help to enhance the corporate value. The ownership structure as the core of the corporate governance structure made a huge influence of the company. Therefore, for the cross-listed companies, it is very necessary to study the correlation of their ownership structure and corporate value. In this paper are the cross-listed companies who issue the A shares and H shares at the same time as subject researched. And the paper investigates the relationship between ownership structure and corporate value of this kind of companies; analyses the impact on corporate value with different ownership structure; and also talks about which kinds of ownership structure can make the corporate value as highest as possible. The paper also provides references for Chinese enterprises by the decision of the cross-listing and provides policy recommendations for cross-listed companies though improving the ownership structure to improve their corporate value.This paper reviews the principal-agent theory, theory of constraints, the theory of information disclosure and other related literature, deeply analyses and reflects the various important factors in the shareholding structure of listed companies combined with our special institutional background, measures the shareholding structure of listed companies through ownership concentration, equity restriction and ownership attribute, and selects some other factors that have an impact on the enterprise value as a control variable to proceed an empirical test. This paper chooses 233 companies as study samples which issue A shares, H shares in China in the 2008-2012 five-year. This paper makes a descriptive statistical analysis of the various variables sample and correlation analysis and multiple regression analysis of the relationship between variables. The paper studies the correlation between ownership structure of the listed companies and corporate value through empirical analysis.Firstly, the paper empirical tests the correlation between the proportion of the largest shareholder, the explanatory variables in ownership concentration, and corporate value. The conclusion is that there was no significant correlation between them. Too high or too low proportion of the largest shareholder can not have a direct impact on the corporate value, the probable reason could be that the cross-listing makes large shareholders are respectively supervised by the stock markets in both places, at the same time the information disclosure is getting transparent. For consideration of these reasons, the largest shareholder will be more consciously to restrain their own behavior. It unlikely happens that the interests of small shareholders are occupied by the of the company’s largest shareholders, even if their proportion are very high. Therefore, there can’t be big impact on the corporate value. In addition, the cross-listing enhances the stock liquidity, increases the enthusiasm of minority shareholders to participate in corporate governance and supervision, and the "free-rider" phenomenon will be reduced. In this case, there will be no great impact on the corporate value.Secondly, this paper empirical tests the correlation between the explanatory variable Z of the equity restriction (the largest shareholder to the second largest shareholder ratio) and the corporate value. The study has found a negative correlation between Z index and the corporate value:the higher Z is and the higher the proportion of shareholding largest shareholder relative to the second largest shareholder is, the lower the corporate value is; the lower Z is and the lower the proportion of shareholding largest shareholder relative to the second largest shareholder is, the higher the corporate value is. That means that increasing of the second largest shareholder’s shareholding ratio can restrict the power of the largest shareholder and is conducive to mitigate the negative impact of "dominance" on the corporate value.Thirdly, this paper empirical tests the correlation between the explanatory variable of ownership attribute (the proportion of state-owned shares and the proportion of tradable shares) and the corporate value. On the one hand, research results that the correlation between the corporate value and the proportion of state-owned is negative, which indicates that too much proportion of state-owned shares in the cross-listed companies will hinder the flexibility of the companies and it is not conducive to improve the corporate value. On the other hand, there is a positive correlation between the proportion of tradable shares and the corporate value which indicates that increasing the proportion of tradable shares in the cross-listed companies could enhance the financing capacity of the companies, improve the transparency of the operations of the companies and thus improve the corporate value.Finally, based on the foregoing study results, the paper puts forward some policy suggestions:cross-listed companies should improve all aspects of the ownership structure to improve its corporate value.