Peer Effect In Benefits Expropriation Of Large Shareholders

With the development of capital market,the ownership structure of most countries shows a trend of increasing concentration.Although the concentration of ownership can reduce the agency cost between shareholders and management to a certain extent,the interest conflict between large and small shareholders evolved from this has become a new agency problem in listed companies.The large shareholders with control advantage have the ability to achieve benefits expropriation to the listed companies,thus damaging the interests of small and medium shareholders.As an emerging market economy country,the phenomenon of "one dominant of large shareholders" is common in Chinese listed companies.At the same time,China's current regulatory system for illegal behaviors such as large shareholders' benefits expropriation is not perfect,which also creates opportunities for its violations.The behavior of large shareholders' benefits expropriation,which is forbidden repeatedly,not only damages the value of the company and the interests of small and medium investors,but also hinders the fair construction and healthy development of China's capital market in the long run.Therefore,many domestic and foreign scholars have carried out a lot of research on this issue,but most of them regard the large shareholders of the company as an isolated individual and ignore the interaction between companies.With the rise of behavioral corporate finance and other emerging research fields,the study of corporate decision-making from the perspective of peer effect makes many problems that cannot be explained by traditional theories well solved,and also makes the study closer to the real situation of capital markets.In view of this,this paper extends the peer effect to the research field of the large shareholders' benefits expropriation.At the same time,it analyzes the irrational factors and rational learning factors that lead to the peer effect of the large shareholders' benefits expropriation.The innovation of this paper is also reflected in that,one the one hand,it provides a new perspective for the study of large shareholders' benefits expropriation.On the other hand,it provides possible and effective measures to suppress the spread of the negative peer effect,and also has some regulatory implications for the regulatory authorities.Based on the sample of A-share listed companies in Shanghai and Shenzhen from 2007 to 2018,this paper examines the peer effect in large shareholders' benefits expropriation in China's listed companies.The results show that:(1)There is a significant peer effect in large shareholders' benefits expropriation of China's listed Companies,which means that the benefits expropriation will be significantly affected by its peers.(2)Peer effect of the large shareholders' benefits expropriation will produce a social multiplier similar to "snowball".In this paper,the conditional variance identification method is used to measure the social multiplier of peer effect in the large shareholders' benefits expropriation.The result of social multiplier effect is 1.35,which also proves the existence of peer effect in large shareholders' benefits expropriation.(3)Heterogeneity analysis shows that peer effect of non-state-owned enterprises is more significant than that of state-owned enterprises,and the peer effect of listed companies with fiercer competition is more significant than that of companies with lower degree of competition.(4)Further analysis shows that improving media attention,analyst tracking and independent director system can significantly reduce the peer effect of large shareholders' benefits expropriation.According to the conclusion,this paper puts forward relevant suggestions.For the government and regulatory authorities,they need to improve the information disclosure system and other laws,and strengthen the punishment for illegal acts,so as to reduce the motivation of large shareholders' benefits expropriation.At the same time,the heterogeneity research shows that the peer effect of large shareholders' benefits expropriation is more obvious in the non-state-owned enterprises and the highly competitive industries.Therefore,the regulatory authorities can't adopt " one size fits all " regulatory model for listed companies.They should take targeted policies for different groups and make full use of the peer effect of benefits expropriation to improve the regulatory efficiency.For the listed companies,they should continue to optimize the internal governance system,such as the ownership structure and the proportion of independent directors,so that internal governance system can truly play the role of supervising the behavior of large shareholders.In addition,the securities analysts and the media should continue to play the external governance function,together with the regulatory authorities to curb the adverse impact of the peer effect in large shareholders' benefits expropriation,maintain the equity of China's stock market,and promote the healthy development of China's capital market.