Government Intervention,Ultimate Controlling Shareholders And Bank Loan

Nowadays, scholars think that the right of ultimate shareholders’ control is the main focus of corporate ownership, and it also has a great influence on the capital structure of the company. Bank loan is the main way to collect debenture capital in enterprises, and the change of its proportion will cause the change of capital structure of the enterprise. Based on the view of bank loan, the essay studies the effect of ultimate shareholder’s control structure on the bank loan by analyzing the relationship between the ultimate controlling shareholders and the bank. Foreign scholars’study of capital structure doesn’t only focus on microcosmic problem of internal governance within the enterprise, and also studies the effect of external macro institutional background on the inner characters of the enterprise. Based on drawing lessons from foreign achievements, our national scholars have made lots of verification and deep analysis considering our special capital market and systems. According to our special national condition and system background, our scholars have gradually studied corporate governance from the points of government legal system, political connection, relationship between politics and market, but their study of the combination of government intervention and ultimate shareholders’control structure with bank loan still needs to be improved. The essay discuss the effect of ultimate shareholders’control structure on the sum and deadline of bank loan based on the combination of government intervention, ultimate shareholders’ control structure and bank loan.The paper is going to explore how the ultimate controlling shareholders affect the enterprise business, financial situation, capital structure and other enterprise governance elements at first. Then it studies how the banks decide to issue a loan and the government plays its role of the debtor and the creditor. An analysis is made on the agency theory, information transferring theory and government support theory, which is the theoretical foundation of the paper assumption. Based on the ideas, the paper chooses A stock company among the 1183 Chinese listed companies as the research sample and chooses the balanced panel data from 2010 to 2014. Through building the model and analyzing the linear regression model, it verifies the influence of the government intervention and ultimate controlling shareholder structure on the bank loans. It arrives at the conclusions:(1) The higher the separation degree is between the ultimate controlling shareholder rights and cash flow, the fewer loans the banks make and the shorter the bank loan period is. (2) The listed companies which have the national property of ultimate controlling object shall get long-term loans more easily. (3) The government has a less influence on the separation degree between the ultimate controlling rights and cash flow as well as the relations among the banks.After a systematical analysis and study, the paper offers the suggestion that Chinese laws and regulations need to be improved continually and the laws and regulations shall be enforced further. At the same time, the government shall promote to restructure the Chinese enterprise equity and strengthen the bank risk management evaluation system and propose the policy advice.