Research On The Influence Of Single Big Holder To The Two Types’ Governance Cost Of Listed Company

Ownership structure is the starting point of corporate governance, and major concern has been paid to equity concentration and dispersion. The single big holder is the typical characteristics of Chinese listed companies as well as one of the focus of academic debate. It is a significant practical problem that how to look upon and cope with this phenomenon in theory and reality. Existing research reflect the features of equity structure directly by the first big shareholder’s stake, which ignores other related shareholders` shareholdings,so that cannot accurately reflect the ultimate big shareholders` controlling power. At the same time, the varying proportion of ownership in specific interval does not necessarily lead to the qualitative change of major shareholders control, which means that corporate governance may show similar features under the same control mode. Therefore, the conversion from proportion of the ownership to holding model is necessary to study the shareholding structure`governing role.This paper uses data 2003-2013 to survey the difference in two forms of governance cost by classifying shareholder model into four categories. With reference to the present research,we define the cost caused by the conflict between shareholders and managers as the first kind of governance cost and the cost caused by conflict between large shareholders and small shareholders as the second kind of governance cost.The empirical results show that for the high proportion controlling types such as majority controlling type and centralized relative controlling type, the two forms of governance cost are lower than those of dispersed relative controlling type and dispersed controlling type which the average differences are 3% and 1.8%respectively. The second governance cost(other receivables rate) of dispersed relative controlling type is the highest. Non-tradable Share Reform helps to improve governance environment and decrease governance cost, but it has different impress on different shareholder models and governance cost. The paper finally concludes that the phenomenon of single big holder cannot be denied simply, but be treated according to models. High proportion controlling types improve corporate governance while low proportion controlling types may bring serious governance problems. And the latter should be the emphasis of supervision.