The Impact Of Corporate Equity Concentration On Stock Returns

With the rapid development of stock market in China,investors play an important role in it.Most of them are concerned about stock returns when they choose the underlying stocks.In the capital market,stock price fluctuations usually lead to the company's stock returns.The change of ownership concentration in different enterprises may affect the stock price movements directly.Therefore,this paper studies the impact of ownership concentration on stock returns.It not only enriches research in this area,but also provides advice for investors,companies and regulators.This article adopts normative and empirical analysis methods.Based on principal-agent theory and property rights theory,this paper studies the impact of different natures of corporate ownership concentration on stock returns.The research sample is selected from 1085 listed companies in the A-share market from 2008 to2017.The thesis measures the shareholding ratio of the largest stock-holder?CR₁?and the square sum of shareholding ratio of the top ten stock-holder(H₁₀).This paper establishes linear and nonlinear multiple regression models.In addition to examining the influence of ownership concentration on stock returns by grouping,it draws the empirical conclusions.Finally,the paper tests the robustness of the results to ensure the accuracy of the results.There are four results in this article.First,there is a significant positive correlation between the ownership concentration and the stock return of A-share listed companies.It indicates that the increase in ownership concentration promotes the increase of stock returns.In different companies,they have different relationships.Second,in central state-owned enterprises and local state-owned enterprises,there is also a crucial positive correlation between ownership concentration and stock return.Third,they have a significant inverted U-shaped relationship in private enterprises.The stock return increases with the increase of ownership concentration,and decreases with the increase of ownership concentration after reaching the critical value.Fourth,in foreign-funded enterprises,public enterprises and collective enterprises,there is no significant linear and nonlinear relationship between ownership concentration and stock returns.