The Property Rights Protection Of Spouse And Company Value

Rapid development of the economy promote the private enterprises have risen rapidly,and family businesses are the main part,which has played an important role in China's social and economic development.Kinship altruism will alleviate the first type of agency costs,which is one advantages of family businesses.Family control is the most important way of governance.Different control models have different impacts on the financial decisions and company value of family businesses.According to the survey,the relationship of spouse gradually surpassed the brothers and sisters,which have become the most common type of family business control.Therefore,it is of practical significance to study the family business jointly controlled by husband and wife.The endogenous problem between the ownership structure and company value has always been a difficult problem in the field of corporate governance.In order to avoid endogeneity,this paper adopts a specific legal system that is the judicial interpretation of the Marriage Law,which as an exogenous variable to test the property rights protection of spouse and company value.The structure of shares and marriage are important factors influencing the value of family businesses.This paper takes the family business of Shanghai and Shenzhen during 2005-2017 as sample,using difference in difference to explore the relationship between the protection of couple's property rights and company value.The results of the study show that:(1)The judicial interpretation of the Marriage Law is an exogenous shock.We found that the relationship of properties are clearer,which improve value of the family business.After the judicial interpretation is implemented,the family business of spouse jointly holds shares,and the equity division between the husband and wife is more clearly,they have a lower probability of taking cash and decreasing the company's value through “tunneling”.(2)After the implementation of judicial interpretation,enterprises with clear property rights of spouse has less cash and value of cash.(3)After the implementation of the judicial interpretation,the family business with clear property rights of spouse,with fewer related transactions,and less “tunneling”.(4)Further analysis we found that in areas with high divorce rates,the value-raising effect of family businesses in which couples hold shares tighter is more pronounced.In order to ensure the robustness of the research,the author made a placebo robustness test for the company value.The main contribution of this paper is to provide empirical evidence of the enterprise at the micro level for relevant social and legal policies affecting economic development.