The Study On The Influence Of Ultimate Control On The Corporate Related Party Transactions And Performance

The ultimate controlling shareholders exist widely in Chinese listed companies, and use their control to implement a series of control actions over listed companies to influence their business decisions and management performance for their own interests. Equity of listed companies in our country is highly concentrated; corporate governance structure is not perfect;regulatory system is weak. All of these provide a great convenience for the ultimate controlling shareholders using related party transactions to grabbing private benefits of control. Because of frequent emptying of related transactions damaging the interests of listed companies seriously, this paper do some empirical analysis about the relationship among the ultimate control, related party transactions and operating performance of the business, and make some recommendations based on the analysis.This paper selected 1899 listed companies in Shanghai Stock Exchange between 2012 and 2014 as a sample of valid data, using multiple regression model to analyze the influence of ultimate control on the corporate related party transactions and performance. This paper makes comprehensive measure of operating performance of listed companies by factor analysis from the ability of debt service, operations, profitability and development, and then take the integrated score represent operating performance of listed companies. Based on analyzing the influence of ultimate control on the business performance, this paper focus on exploring mediating effect of related party transactions to the ultimate control affecting the business performance. The results show that: Related party transactions play a certain degree of masking effect on the influence of the control of the ultimate controlling shareholders on the business performance, and the negative effect of related party transactions on business performance weakened the positive effect of ultimate controlling shareholder on the overall performance; mediating effect of related party transactions is not significant in the process of Subject : The Study on the Influence of Ultimate Control on theCorporate Related Party Transactions and Performance——The Empirical Data from Shanghai Stock Exchange Specialty : Accouting Name : Guo Qiaoli(Signature)Instructor : Wang Xinhong(Signature)ownership of the ultimate controlling shareholders affecting the business performance, but higher ownership will increase the degree of consistency in ultimate controlling shareholders and business interests, prompting them to take action helping improve business performance;in large separation of control and ownership, the related transactions play a strong mediating effect of its impact on the business performance of the process, and the separation of control and ownership let ultimate controlling shareholders have the motivation and ability to hollowed out business performance of listed companies mainly through related party transactions. Finally, this paper makes recommendations and suggestions that the listed companies should optimize the equity structure, and promote oversight role of independent directors, and strengthen the regulation of related party transactions, and improve the quality of relevant information disclose in listed companies, and improve the relevant legal system.This paper hopes to provide some reference about suppressing the ultimate controlling shareholder emptying business interests.