On Financial Risk Of Equity Structure And Institutional Share-holding

In recent years,China's economic growth has slowed down and entered the new normal phase.This is the necessary way for a country's economic restructure.In the process of transition,companies will encounter various kinds of influence,such as the frequent collapse of domestic and foreign companies.According to relevant data,at the end of 2006,non-tradable shares of listed companies in China accounted for approximately 62% of the total share capital,and tradable shares accounted for approximately 38% of the total share capital.According to the research of Linlin Bian(2016),It can be found that the proportion of non-tradable shares of listed companies is too large,causing the low level of corporate governance.To solving the problem,China applied the reform of the split share structure.Although,such action has temporarily alleviated the problem of high concentration of equity,there have been unilateral circulating shares with restricted sales,which indicates that there are certain defects in the governance structure of the equity structure.Therefore,this paper studies the influence of shareholding structure on the company's risk under the background of such special period of equity reform.This article selects the listed companies in the transportation and logistics industry from 2008 to 2016 as the research object,dividing the ownership structure into two aspects: equity concentration and equity balance,and adding the new variable of institutional holding.Through direct and indirect theoretical analysis,the paper will put forward hypothesis,and then use a multivariate linear analysis on the fixed effect model to discuss the optimal shareholding structure for reducing theenterprise risk.Through the data analysis of the transportation logistics industry from 2008 to2016,it is found that the relationship of ownership concentration and enterprise risk is not a simple linear regression,instead there is a U-shaped nonlinear relationship with a critical value of 36.65%,which means that,when the concentration of ownership is less than 36.65%,with the increase in equity concentration,Z-score increases and the corporate risk decreases;when the concentration of ownership is larger than 36.65%,with the increase in equity concentration,Z-score decreases and the company's risk increases.The degree of ownership balance is significantly positively related to corporate risk.When the company's equity balance G-value is less than 1,the company is in a safe zone.Through calculation,when the maximum shareholding ratio of the company is 36.65%,the enterprise risk is minimal,meanwhile the sum of proportions held from the second to the fifth largest shareholder should be less than 36.65% to ensure that other shareholders will not have too high a balance of checks and balances,thereby reducing corporate risks.The proportion of institutional holdings is significantly negatively related to corporate risks.The introduction of institutional investors with governance capacity by external shareholders will reduce corporate risks.Finally,through the analysis of the empirical results,combined with relevant theories,this paper puts forward suggestions.