On The Influence Of Dual-Class Share Structure On Baidu Company’s Enterprise Value

Enterprise value has always been a hot issue that scholars at home and abroad have focused on and studied,It is of great significance to study corporate value so as to manage the company effectively.Generally speaking,Whether the company’s equity structure is appropriate or not directly affects the efficiency of operation and management.Only when the enterprise properly allocates the shareholding structure according to the company’s own conditions,it is possible to enhance the value of the enterprise.The dual-class share structure has special significance as a special structure design different from the traditional one-vote one.Especially for the Internet industry,due to its special financing characteristics,the company’s founders have a positive role in the company’s absolute control over the company and promote the company’s long-term development.In order to explore the relationship between the dual-class share structure and the value of the firm,this paper mainly adopts the research methods of literature research and case analysis.Firstly,it introduces the theory of dual-class share structure and enterprise value,and also summarizes the theoretical research on the dual equity structure at home and abroad and the impact between ownership structure and corporate value.On the basis of literature research,this paper analyzes the root cause of the emergence of dual-class share structure: shareholder heterogeneity and the impact of dual ownership structure on corporate value.Then,using the case analysis method,select Baidu’s successful listing in the United States,and take Baidu’s shareholding structure as the main line to analyze the reasons for Baidu’s choice of dual-class share structure.Based on the reality of shareholder heterogeneity,the paper establishes the influence path of the dual-class share structure on the corporate value of Baidu company,and then selects the financial data of Baidu company to implement the dual shareholding structure several years ago and calculates the Tobin Q coefficient,and compares it with Google.Combined with the financial analysis method and market effect,the paper analyzes the impact of the dual-class share structure on the corporate value of Baidu.Finally,according to the impact of the dual shareholding structure on the corporate value of Baidu,it is found that under the dual shareholding structure,Baidu has a negative impact on corporate value in terms of long-term strategy,the shortcomings of cultural concepts,and the small voices of small and medium-sized shareholders.It also puts forward suggestions on strengthening the supervision of B-share holders,restricting the scope of application of special voting rights,and establishing a protection system for small and medium-sized shareholders.Through research,the conclusions of this paper are as follows: First,based on the reality of shareholder heterogeneity,Baidu maintains the control of the founder through the dual-class share structure and has the logical rationality of its existence.Second,the dual equity structure maintains the control of founder Li Yanhong,and through the implementation of long-term development strategy,protects and inherits Baidu’s unique corporate culture to influence its corporate value.Third,strengthening the supervision and restriction of special voting rights and its holders and improving the protection system for small and medium shareholders are the main methods to resolve the negative impact of the dual equity structure on corporate value.The innovation of this paper is based on the reality of shareholder heterogeneity,analyzes the logical rationality of the existence of the dual-class share structure,and enriches the literature of dual equity structure research.Based on the reality of shareholder heterogeneity,the dual-class share structure affects corporate value by ensuring the founder’s control rights to achieve long-term development strategy and inherit a unique corporate culture.