Controlling shareholders and related party transactions: Evidence from the split share structure reform in China

• Main Authors: Choi, Chi-kit, 蔡子傑
• Other Authors: 洪榮華
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/60390873174207071357

碩士 === 國立中央大學 === 企業管理學系 === 101 === Chinese government implemented the split share structure reform in 2005, with an attempt to eliminate controlling shareholders’ incentive to expropriate the minority shareholders’ wealth through aligning the interest of controlling shareholders and minority shareholders. Related party transaction is one of the common ways for tunneling, which might be affected by the split share structure reform. Our sample observations include all companies listed on the Shenzhen and the Shanghai Stock Exchange during the years from 2002 to 2010. The OLS regression models are used to investigate the impact of split share structure reform on related party transitions, considering the following different types of controlling shareholders: state owned, non-state owned, central government, local government, foreign institutional investors and local institutional investors. We also investigate the monitoring effects of the second largest shareholder. The empirical results show that related party transactions are reduced after the split share structure reform, especially in firms controlled by state owned shareholders and central government. Finally, the split share structure reform enhances the monitoring effects of the second largest shareholder in firms controlled by non-state owned shareholders.