The Influence Of Excess Control Right And Agency Problem On Firm Performance

In order to unveil the mystery of the separation of control rights and cash-flow rights,firms are divided into two parts by the control rights concentration and we discuss the Multi-agency problem and corporate performance in different situation.Using “excess control right” to measure the extent control rights over cash flow rights and the latest research production about “propping” and “tunneling”,this paper research the relationship between “excess control right” and company performance.What's more,the “excess control right” has “U-shaped relation” on the net amount of fund embezzlement,which provides further performance on the relationship between “excess control right” and company performance in the behavior level.We find if the control right is highly concentrated,the corporate value is negative correlative with control rights by reason of taking occupation of companies interests.Given the ultimate controller a modest power,the control rights would have a positive effect on value because the ultimate controller's greater incentive to monitor the manager will alleviate the conflicts of interest between owners and managers.Performance examination and performance examination from government which is related to promotion are significant to ultimate controller of SOEs.So the ultimate controllers of SOEs are not inclined to embezzle.Excess control right” has inverted U-shaped impacts on enterprise performance and voting rights will strengthen this relation.What's more,the “excess control right” has U-shaped relation on the net amount of fund embezzlement,supporting hypothesis in the behavior level.