Equity Restriction?Effectiveness Of Internal Control And Corporate Value

Since the Chinese Economic Reform,China's capital market has been rapid development,now it has obviously become an important component of China's socialist market economic system.As the representative of ownership concentration,the phenomenon of one single large shareholder widely exists in capital market,in this case,the controlling shareholders have sufficient capacity and motivation to plunder the minority shareholders' interest,disable internal control and damage corporate value.As a balanced shareholding structure,equity restriction is able to effectively restrain tunneling and supervise large shareholders and management,which helps listed companies to establish and implement robust internal control system and enhance corporate value.Studies about the relationship between shareholding structure and corporate governance of listed equity have always been the attention focus in theory and practice fields.Different from foreign scholars generally holding the opinion that equity restriction has function of improving corporate governance,study on China's capital market appear two different conclusions:Equity restriction has a positive effect on corporate governance and equity restriction has no significant effect or even negative effect.Some scholars hold that ignoring the nature of balancing shareholder may be an important reason to this difference.On the basis of previous studies,this paper introduces nature of shareholder and mediating effect in the analysis of relationship between equity restriction and that are effectiveness of internal control and corporate value and conduction effect of internal control in the relationship of equity restriction and corporate value to enrich the theoretical study.Based on the theoretical analysis,this paper constructs empirical model by selecting sample data and relevant variables,and then test model by using descriptive statistics,correlation analysis and test of multi-collinearity.on this base,analysis internal relation among equity restriction?internal control and corporate value by multiple regression and mediating effect model.Empirical results show that motivation is more effective than ability in considering restriction effect;compared to ability,the nature of balancing shareholder is more significant impact to restriction effect;Private shareholder can play a role in equity restriction,and state shareholder's effect is poor;correlation between effectiveness of internal control and corporate value is significant positive;internal control in the system of shareholding structure and corporate value plays a mediating role.Finally,according to the results of theoretical analysis and empirical testing,this paper makes two aspects recommendations which is about improving effect of equity restriction and internal control:establish reasonable and effective shareholding structure of equity restriction;concern restriction motivation,establish and improve the constraint mechanism;put more attention to internal control legal system,strengthen supervision and punishment in the aspect of laws and regulations;guarantee the implementation of internal control and prevent the useless of internal control.