The Influence Of Ultimate Controller's Ownership On Corporates' Leverage

Capital structure has always been the focus of corporate governance research.It mainly studies the proportion of debt capital and equity capital.Since La porta et al.(1999)first proposed the concept of "ultimate controller",scholars at home and abroad have found universal existence of ultimate controllers in listed companies.Since then,the research on the capital structure of the company has gradually turned to the influence of the agency conflict between the actual controller and the small and medium-sized shareholders on the capital structure under the background of the concentration of equity.The ultimate controllers can choose the mode of controlling the stock rights of the listed company according to their own needs,or can adopt the behavior of "supporting" or "hollowing out" to maximize the private interests and encroach on the interests of small and medium shareholders or creditors according to their own motives.With the development of China's capital market and the strengthening of investor protection,the way that the ultimate controller uses direct shareholding to control the listed companies is gradually increasing.Compared with pyramid shareholding,the information transparency of direct shareholding is high,which is conducive to reducing the agency cost,urging the actual controller to pay attention to the long-term operation of the company,so as to improve the value of the company.In recent years,with the increasing downward pressure on the economy and the implementation of a series of policies on economic structural reform,the pressure on the operating performance of listed companies has increased and the ultimate controllers have decreased their holdings.The reasonable reducing behavior of the ultimate controller of the listed company will not have a huge negative impact on the companies.But De-Leveraging Policy may bring survival pressure to enterprises,especially non-state-owned enterprises,leading to the shareholding change of some ultimate controllers of listed companies.Thus causing creditors to be alert to the company's liability operation ability,as well as affecting the company's leverage ratio.Is the implementation of de-leverage policy effective? What is the relationship between the holding level of the ultimate controller and the leverage ratio of the listed company? Is there any obvious difference between state-owned and non-state-owned enterprises? Therefore,this paper will study the impact of de-leverage policy and the actual controller's shareholding on the leverage ratio of listed companies,and explore the difference between state-owned enterprises and non-state-owned enterprises.First of all,by reviewing the relevant literature and classical theories,this paper theoretically analyzes the influence of deleveraging and ultimate controller holdings on the leverage ratio of listed companies,and puts forward the basic assumptions.Secondly,this paper uses the fixed effect model to make an empirical study on the unbalanced panel data of 2812 A-share listed companies in China from 2012 to 2018.At the same time,it further discusses the impact of deleveraging and ultimate controllers on different types of enterprises.Thirdly,according to the empirical results,this paper puts forward suggestions from the government,the company and the social level.The empirical results show that:(1)There are obvious differences between different types of enterprises in corporate management and governance.The debt financing level of state-owned enterprises is higher,while non-state-owned enterprises have better profitability,growth ability and incentive mechanism.(2)Deleverage policy has a significant negative impact on corporate leverage,especially on state-owned enterprises.(3)The ultimate controller's shareholding level is positively related to the company's leverage ratio.Because of the consistency of its own behavior orientation with the company's value interests and the non dilution effect of liabilities,the higher the actual controller's shareholding ratio is,the more debt financing can be obtained.(4)For non-state-owned enterprises,the positive effect of the ultimate controller's holding on the company's leverage ratio is greater than before the implementation of the de leverage policy,which is weaker for state-owned enterprises.