The Impact Of The Xpansion Of Non-state Ownership Shares On Operating Performance And Corporate Governance

The split-share structure was a legacy of China's initial share issue privatization(SIP),in which state-owned enterprises(SOEs)went public to issue minority tradable shares to institutional and individual investors.It has caused distortions in capital market pricing.The split share Structure reform provide a more convenient way for the privatization of state-owned shares by eliminating the legal and technical barriers to the conversion between tradable shares and non-tradable shares.This paper confirms that the split share Structure reform has bring partial privatization to state-owned enterprises(SOEs).In order to test the impact of the expansion of non-state ownership shares,this paper adopt a differences-in-differences approach to compare the changes in SOEs and non-SOEs.The results shows that the expansion of non-state ownership shares boosted operating performance and corporate governance.But the related transaction also increased with the non-state ownership shares.A large number of studies have shown there is some relationship between corporate governance and operating performance.Through empirical analysis we found the improvement of corporate governance promoted the improvement of operating performance.Increasing the number of board meetings and shareholders' meetings bring more consideration to company's decision-making.Increasing incentive for supervisors(increased executive pay,increased holdings of the board)bring more motivate for directors and executives to develop their business.However,the increasing in related transactions proved to be unfavorable to the improvement of operating performance,which is consistent with the theory that the related transactions hinder market competition.At the same time,this article found that the capital investment also promote the operating performance.The Split-Share Structure Reform unified goal of shareholders,and make them be willing to investment more capital to support the development of enterprise.