Shareholder Relations, Divestitures And Operating Performance Of Loss-making Companies Improved

With the development of the “Five Merger Activities” in western developed countries,As a contractile capital operation mode,asset divestiture has aroused the attention and research of foreign academic and practical circles in the same way as asset merger.As an amendment to mergers of excessive assets,the divestiture of assets can optimize the capital structure and adjust the distribution of resources.Also,it is an important means for the company to deploy the business boundary and plan the strategic policy.But in China,the capital market started late,a lot of research is focused on the merger and expansion of assets,divestiture has not been given enough attention.At the same time,the number of loss listed companies has increased in recent years in China.Most of the loss companies choose to shad assets to reverse their performance.So,is the asset divestiture really effective in improving the performance of the loss companies? Does the divestiture of different motivations have a difference in corporate performance? In addition,the relationship between shareholders has become a new topic of social capital research.Can it play a positive role between the divestiture of assets and the improvement of the performance among the loss companies? Can it better drive loss companies to reverse their losses? All of these are what this article needs to discuss.So far,most scholars have discussed the classification and influencing factors of asset divestiture,and the effect of divestiture on the company's value(performance).But there are some inadequacies in the existing research.Firstly,most of the previous studies take profit samples or mixed samples as research objects to analyze the relationship between divestiture and company performance,which does not take into account the difference between the loss companies and the profit companies and explores the performance of the divestiture separately from the point of view of the more concerned loss companies.Secondly,the divestiture is a major decision of a company,and its correctness depends on an efficient board of directors or shareholders.The existing literature only analyzes the impact of divestiture behavior on company performance,but it ignores the role of management and shareholder relationship in making process.Thirdly,because of the different motives of divestiture assets,the benefits of different enterprises are different.Although the existing literature has a theoretical division of the motivation of divestiture,but it does not make an empirical study by differentiating different stripped purposes,and there is no comparison between the performance improvement results of different target divestitures.The contribution of this article lies in the following points: First,this article tries to explore the relationship between the divestiture and the improvement of the loss company's operating performance.Second,this paper will introduce shareholder relationship as a moderator,and specifically study the relationship between shareholder relationship,divestiture of assets and the performance improvement of loss companies.Third,this paper will deeply study the influence of different motives on the performance of the loss companies,and make an empirical study on the theoretical classification.The article is based on the institutional background of Chinese reality and firstly combs the related theories and research achievements of the shareholders' relationship,the divestiture of assets and the improvement of the operating performance of the loss companies.On the basis of this,In this paper,the data of 2216 loss listed companies of Shanghai and Shenzhen A shares for 2003-2015 years are used as the research samples.Also,the article analyzes the relationship between divestiture(Whether or not to peel off the assets and divestiture motivation)and the performance improvement of loss companies,and builds a model and makes an empirical analysis of the relationship among shareholders relationship,divestiture and the performance improvement of loss companies.The study found that the loss companies with asset divestiture have a better performance improvement than which without asset divestiture;The intimacy of the shareholders' relationship will affect the performance improvement of the divestiture.The closer the shareholder's relationship is,the better the performance of the divestiture is to improve the performance;At the same time,with distinguishing the divestiture motivation of different loss enterprises,the deficit enterprises which strips the assets with the purpose of “raising funds” are better than the deficit enterprises which strips the assets with the purpose of "centralized operation" and " Integration of assets " in the short term.Finally,the following suggestions are given on the basis of empirical analysis and research results: The company should attach importance to the divestiture of assets,periodically peel off some non core assets and optimize the capital structure so that the value of the company is steadily improved;The company should clarify the motivation of divestiture,attach importance to the utilization and integration of resources under different motives,and make the divestiture decision under the guidance of correct strategic planning;The company should coordinate the relationship between controlling shareholders and small shareholders,improve the company's internal and external governance and information disclosure system,and play a positive role in the benign shareholder relationship;The government and market institutions should establish and improve the relevant policy system and supervision mechanism to keep the securities market in a healthy and sustainable way.