Research On The Tunnel Excavation Of Large Shareholders To Small And Medium Shareholders

Traditional corporate governance theory has focused more on how to protect the interests of company shareholders from being invaded.The corresponding governance structures and mechanisms are designed based on such considerations.However,in modern companies,many companies have one or more major shareholders with absolute influence.For those minority shareholders who account for the vast majority,they actually only have nominal control.The actual risks assumed are not equal.In this reality,the principal-agent problem is concentrated in the conflict of interest between the controlling majority shareholder and the minority shareholders.Especially when the capital market lacks a protection mechanism for the interests of small and medium shareholders,the large shareholders who have control over the activities of the company are even less likely to be restrained.They are likely to maximize their own interests at the expense of the interests of the majority of small and medium shareholders.Instead of maximizing the company's interests to increase its own wealth,eventually leading to tunneling problems for controlling shareholders.In addition,in 2019,the Asian-African Bank and New World Wealth jointly released the 2019 Global Wealth Migration Report.The report shows that there were 15,000 rich people in China who emigrated in 2018,a 50% increase compared to 10,000 in 2017.Not only does the number of overseas wealthy rank first in the world,but the growth rate also ranks first in the world.It can be seen that the phenomenon of immigration is common among the rich in China.It is of practical significance to study the effect of the actual controller's overseas residency on the tunneling behavior of major shareholders.This article first uses the literature research method to summarize the current research status of tunneling behavior.The specific contents include the causes and influencing factors of tunneling behavior,the way in which tunneling behavior is realized,the impact of tunneling behavior on enterprises,and the impact of actual controller's overseas residency on businesses.Then through theoretical analysis,based on the principal-agent theory,information asymmetry theory,signal transmission theory,transaction cost theory,and control rights private income theory,find out the main factors affecting tunneling behavior,and at the same time include whether the actual controller has overseas residency.The research scope has enriched related theories and research.Finally,through the empirical analysis method,based on the above research,put forward the research hypotheses,construct the research model,and select the data of our private listed companies from 2014 to 2018 as the research sample.Use Excel and Eviews statistical analysis software for data processing and empirical analysis.the study.The research results show that after the completion of the split share structure reform,there still exists a tunneling behavior of large shareholders to small and medium shareholders in China.There is a significant positive correlation between the two.When the large shareholders have more control,the more serious the damage of interests;the control of other shareholders can restrict the tunneling behavior of large shareholders,and the higher the shareholding ratio of other shareholders,the more they can suppress tunneling behavior and protect their own interests from being damaged;when the actual controller owns overseas residence,this may further aggravate the tunneling behavior of large shareholders to small shareholders,which may be because the crime cost is lower at this time;when the country or region signs extradition regulations with China,it can reduce the tunneling behavior to a certain extent because when major shareholders flee overseas,the country or region is obliged to extradite the major shareholders to China and increase the cost of crime.The research significance of this article enriches the existing research on the one hand,and includes the two factors of overseas residency and extradition clauses.On the other hand,it reminds small and medium shareholders and external regulatory authorities to increase their attention to the actual controller 's overseas residency to safeguard the legitimate interests of small and medium shareholders.Finally,based on the above research results,in order to limit tunneling behavior and protect the interests of small and medium shareholders from being harmed,the following suggestions are made: 1.Improve the corporate governance mechanism;2.Improve the company's decision-making mechanism;3.Establish an effective external supervision mechanism;4.Improve relevant laws to safeguard the interests of small and medium shareholders.