The Analysis On The Opportunism Behavior Of Foreign Actual Controlling Shareholders In The Listed Companies

There is a tendency that an increasing number of foreign investment become the actual controllers of the listed companies in China.During 2003-2011,76 companies are actually successively controlled by foreign investment for at least 5 years.Among these cases,there are 41 companies were converted into foreign listed companies through mergers and acquisitions,while the rest are converted from limited corporations controlled by the foreign investment.Based on the accessibility of the data,this paper studies the financial performance and social responsibility of the listed companies merged by the foreign investment(the research period is from the two years before the mergers time to the following five years after the merger)and the foreign listed companies converted from the limited companies(the research period is from the 2 years before the list time until the following 5 years after the list time),and the financial performance all decreases in some degree.By using the principal component analysis method,this paper approves that the financial performance actually controlled by the foreign investment(from the 2 years before the actually controlling time to the following 5 years)decline after the mergers of the foreign investment.The social responsibility of the foreign listed companies decline in some degree.Taxes revenue contribution degree of 59 listed companies controlled by foreign investment has declined apparently from the first 2 years to the fifth year after the actual controlling,and the manufacturing industry declined most.While during the following 5 years after the actual controlling time,the numbers and the salary of the employees did not increase apparently.However,the salary of the senior management is much more than that of the ordinary employees.Which shows that there are unreasonable corporate governance within the listed companies controlled by the foreign investment.By using the multiple regression analysis,this paper finally verifies that the foreign controlling shareholders transfer the profits which is achieved by the strengthening of ownership(the research time ranges from the merger or the list to the fifth year).It's undeniable that the introduction of the foreign investment has contributed to the improvement of the technology and the management of the domestic companies in some degree since the reform and opening-up policy.However,the financial performance and the social responsibility of the foreign-controlled companies decreased a lot while listed companies controlled by the foreign investment get a lot of preferential treatment from China.On the one hand,the listed companies controlled by the foreign investment has been expanding the management scale.On the other hand,the financial performance of the foreign companies has declined.This contrasting phenomenon proves the opportunism motivation of the foreign controlling shareholders.According to the stakeholder theory,the government and the employees all are the stakeholders of the company,because they invest the specific asset and bear the related risks.From the perspective of the equity theory,the stakeholders should have the residual rights.However,the foreign investment enjoys many preferential tax policies and utilize the public production and services in China while the financial performance and social responsibility of the companies controlled by the foreign investment has decreased a lot,which impaired the fair competition mechanism environment in the market.Under the background of economic transformation and upgrading,an objective analytical attitude should be given to the foreign investment.On the one hand,the foreign investment have the advantages such as the positive effect on the corporate governance and the technology spillover effect.On the other hand,the opportunism of the foreign investment should not be neglected.Once introduced into China,strict investigation should be given to the foreign investment.The foreign investment in pollution industry and over capacity industry should be reduced gradually and advanced technology of foreign investment introduction should be increased.At the same time,the blind introduction of the foreign investment from the local government should be reduced,thus ensuring the high quality of the foreign investment from the start.What's more,the domestic companies and foreign companies should be treated equally and the market access threshold for foreign investment should be improved,through which the aim of foreign investment on improving corporate governance and bringing technology can be achieved.Finally,the laws and regulations about the list and mergers of foreign company should be perfected and the post-listing information disclosure of the foreign company should be strengthened,thus reducing the opportunism behavior of the foreign investment.