Empirical Research On Bank Share-holding,Profitability And Corporate Value

At present,due to the earnings management behavior of management authorities,the value of company fails to reflect the true profitability of it.In Shanghai and Shenzhen A-shares,many listed companies companies which profitabilities are not strong,their values are very high.On the contrary,many companies which profitabilities are very strong,their values are grossly undervalued,which seriously affects the interests of investors.Speculating stocks doesn't need to focus on profits,becomes a pet phrase for stock investors.How to enhance the correlation between profitability and value of the company,and to protect interests of investors,is the focus in this paper.In the domestic,according to the commercial bank law,banks are not allowed to hold shares of listed companies.But in Shanghai and Shenzhen A-share listed companies,the phenomenon of the bank as shareholders both as creditors at the same time is abundant.In some other countries,such as Germany,Japan and the United States,bank holding shares of listed companies is allowed.After the bank shares holding,research of which kind of influence on the governance structure of listed companies is rare,especially of the influence on the profitability and value of the company.Based on the Shanghai and Shenzhen A-share listed companies from 2010 to 2015 as the research object,this paper used the method of multivariate linear regression analysis,in order to explore the impact of bank share-holding on profitability and value of the company.The research found that,although the relationship between profitability and value of the company is positive correlation,but the correlation is not significant.Bank share-holding can obviously improve the profitability of listed companies,and effectively enhance the profitability and significant positive correlation between value of the company.This will be propitious to safeguard the interests of investors.In the same time,because that bank share-holding can improve the profitability of the company,it can play a further role in promoting the enhance of the firm value.Based on the above research results,this paper advises,in view of the phenomenon of no significant correlation between profitability and value of the company,listed companies should make changes from two aspects,to improve the corporate governance mechanism and strengthen the positive significance of the relationship,and to promote enterprises long-term and health development.On the one hand,strengthen the company's internal governance structure.Setting up a set of effective rules and regulations,in order to regulation produced by separation of ownership and managerial authority of principal-agent problems between shareholders and managers,to prevent the excessive earnings of management,and to ensure the integrity and reliability of the accounting information.On the other hand,optimize company's ownership structure.Introduce diversified shareholders represented by banks,accept the good supervision and monitoring proactively,change the phenomenon such as “a dominant” or insider control,in order to improve the management efficiency of enterprises,and to protect the interests of shareholders and creditors.