Research On The Influence Of Dual-class Share Structure On Business Performance

Since the introduction of the Sci-Tech innovation board rules in March 2019,it has received a lot of attention.Among them,the acceptance of enterprises with "voting rights difference arrangement" to be listed on the Sci-Tech innovation board is a breakthrough of the "Company Law" on the principle of "the same shares and the same rights".And the Sci-Tech innovation board has become the test field of A-share market of accepting dual-class firms.Because A-share market did not allow dual-class share structure,many Internet companies have chosen to list in the United States in order to maintain control of the company while IPO,causing a group of outstanding domestic companies to miss out.The liberalization of the dual-class share structure by the Sci-Tech innovation board this time is conducive to achieving a win-win situation for multiple parties in the capital market.Investors can better share the profits from the development and performance growth of local enterprises,and the company's decision-making power can still be grasped to ensure the long-term development track of the company.As the dual-class share structure violates the principle of same shares and same rights,although the effective separation of company control and dividend rights can allow managers to better focus on the long-term development of the company.However,the interests of small and medium shareholders are also more susceptible to infringement under this structure,so there has always been controversy over the structure.Whether a company needs to adopt a dual-class share structure or not will ultimately depend on whether this arrangement of equity structure is conducive to improving corporate performance,corporate stock prices and long-term development.Therefore,exploring the impact of dual-class share structure on the companies' business performance and the development of the Sci-Tech innovation board on the establishment of the dual-class related system is a very worthwhile issue.This paper first expounds the theoretical basis of dual-class share structure and business performance from the academic research level,and then reviews the research results of domestic and foreign scholars on the development,advantages and disadvantages of the dual-class share structure and its relationship with corporate performance.Next,based on the research sample of American China-concept stocks,this article compares and analyses the differences between the arrangements of voting rights and cash flow rights,business performance between dual-class share structure companies and the single ones.Through panel data regression,we find that there is a negative correlation between the dual-class share structure and the Tobin Q,and a positive correlation with the ROE.Then this article selects the domestic e-commerce giant JD.com,which is listed on NASDAQ with a dual-class share structure,as a specific case study object.It elaborates the whole process of financing and listing and the relevant information about the dual-class share structure of JD.And the company performance before and after its listing is compared longitudinally,and then compared horizontally with Suning,which adopts a single-class share structure.By analyzing the dual-class share structure of JD,we found that in the short-term,it has not helped improve JD's business performance,its Tobin Q value has not improved and ROE is still negative,but in the long run,JD's dual-class share structure enables it to maintain high-speed and high-quality development in the expansion.Overall,it has a positive effect on the company's long-term performance.Finally,drawing on the relevant legislative experience of the developed capital market on the dual-class share structure arrangement and investor protection,this article also puts forward several policy suggestions.The research in this article not only helps to understand the current status of the adoption of the dual-class share structure of American China-concept stocks and the specific arrangements of the company for the dual-class share structure,but also helps to analyze the impact of the dual-class share structure on the business performance of the company.It provides reference for related domestic science and technology enterprises to try the special kind of share structure,for investors to consider whether to invest in enterprises with dual-class share structure,and also for the Sci-Tech innovation board to make better arrangement of differentiated voting rights.In a word,this research has a positive significance on improving corporate governance of A-share companies,cultivating mature investor groups and improving the rule arrangements of the capital market.