The Impact Of Private Enterprise Ownership Structure On Agency Costs

The development of China's capital market and the institution system is not perfect enough.There are many cases of corporate fraudulent issuance and financial fraud whthin our stock market,which eventually led to investors'serious loss.Therefore,the investor protection is being paid more and more attention by academia.In the field of corporate governance,the investor protection is rooted from the agency problem.Principal-Agent problem has been a hot spot in the research field for many years.The conflict of interests between managers and shareholders,large shareholders and small shareholders are common in China's quoted companys.The equity structure is the most direct factor affecting the agency cost.It is also the starting point for the scholars to study the agency cost from the internal governance mechanism perspective.Reasonable arrangement of the equity structure is beneficial to alleviate the agency problem.The internal behavior of a company is influenced by the external institutional environment,and the investors' legal protection is an important external governance mechanism.Only there is effective legal supervision and higher efficiency of law enforcement,can the investors'legal protection play a positive role.So when study the relationship between the equity structure and agency cost,we must take the role of the external institutional environment into consideration.According to the principal-agent theory,incomplete contract theory and the institutional theory,this paper analyzed how the ownership concentration and equity balance degree influence the two types of agency costs,and analyzed the role of investors' legal protection in corporate governance,as well as the investors'moderating effect towards the relationship between ownership concentration and equity balance degree and the two types of agency cost.We collected the financial data of the private quoted companies for five years.We drew lessons from previous studies and did the regression analysis of the relationship between the equity structure and the two types of agency cost by the statistical software.We used the external legal environment as an index for investors' legal protection,to explore the moderating ef fect of investors' legal protection.According to the results of empirical analysis,some hypotheses are verified.The conclusion of this paper is that the ownership concentration has a negative effect on the first and the second kind of agency cost,however,investors' legal protection didn't intensified the negative degree within the correlation.It shows th the environment of legal protection for external investors is poor relatively,and there exists lower law enforcement and supervision efficiency of the investors' legal protection,thus we put forward some enterprise management and policy suggestions...