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The state-owned listed companies which control is transferred Governance Effect

Author: ZengZhaoZao From: www.yourpaper.net Posted: 2009-07-03 14:14:56 Read:
Abstract: The control is transferred as a mechanism to improve the level of corporate governance, the theoretical and empirical research support has been abroad. 2000-2004 state holding listed companies which control is transferred back and forth within the corporate governance mechanism variables, this empirical test. The results showed that, overall, our state-owned listed company in which control is transferred, the corporate governance internal mechanism to get improvement, the buyer and the seller of the properties, the transaction whether paid, and eventually control the people whether the change of corporate governance to improve the degree has a significant effect.
Keywords: control is transferred; owned holding; corporate governance

1 INTRODUCTION

Media reports, just ST shares, or even more than 500% in 2007 the largest increase among the 10 stocks. ST shares of asset quality, business management or corporate governance can not say that is good, alone original management to improve its business and improve profitability is unlikely. This stock rose because the asset restructuring is expected to or have already been implemented asset restructuring plan. Major asset restructuring events in the capital markets, the company will cause great concern in the market. In China, the narrow asset restructuring mainly refers to the equity restructuring or reorganization of control over. Due to our special institutional background, the market for asset restructuring events far more than other developed capital markets. The presence of a large number of state-owned shares of listed companies in China, but also makes the asset restructuring of listed companies have a special significance.
Domestic transfer of control of the company performance, overall performance improvement based on trying to find the performance differences of the different sub-samples, the sources of performance improvement or impact factors, but few focus exclusively on the state-controlled listed companies The transfer of control over the nature of the buyers and sellers, and ultimately control whether the change, the impact of the transaction in the form of the transfer of control over the governance effect. In this paper, transferred to China from 2000 to 2004, the state-controlled listed companies control over sample empirical analysis of different forms of the different nature of the buyer, seller and ultimately control whether change control is transferred corporate governance effect.

2 Study Design

2.1 samples determined with data collection
In this paper, the first major shareholders equity transfer caused change is defined as the listed companies as the control is transferred. The state-owned listed companies listed companies occurred prior to the transfer of the control of the largest shareholder of the company as a state-owned nature. Our control is transferred to the sample, and the transactions database, data from CCER equity transfer agreement Corporate Governance variables the data from CSMAR and the the CCER corporate governance database. Relatively small transfer of control over events in 2000, has been a lot of research on this sample, taking into account the corporate governance aspects of data availability, this paper mainly analyzes the 2000-2004 sample control is transferred in accordance with the following criteria were selected: (1) The first announcement of the equity transactions occurred in 2000 or later, the announcement has been completed in 2004 or before; (2) the equity transfer led to the largest shareholder change; (3) transaction before the buyer is the controlling shareholder; (4) the occurrence of multiple transfers you take the last, and the first announcement of the transfer last year from the last announcement more than two years; (5) Non-financial corporations, and the seller is not state-owned financial institutions. Ultimately this study sample of 219 listed companies. Nature of buyers and sellers, the transfer is paid, and, ultimately, to control whether to change the classification. The local representatives buyer for local government agencies and local enterprises, the central enterprises directly under the central government enterprises and research institutions, but not including universities. Private, including foreign-funded enterprises. If the buyer and seller are the same local government agencies or state-owned enterprises, we believe that the largest shareholder changes did not lead to the ultimate control changes, but according to our definition, its control over the transfer. Addition to the buyer is a private sub-sample of the final control change, 33 of which control is transferred, but ultimately control the people do not change.
2.2 Variable Description
Reflect the level of corporate governance and external mechanisms and internal mechanisms, from the the company individual level, the main internal mechanism. The internal mechanisms including ownership structure, board of directors and executive incentive system. Corporate governance variables of this article reference Bai Chong-En variables set. (1) The chairman of the board changes, general manager of change dummy variables. Control over the market as the most basic governance mechanism is achieved through the transfer of control over the replacement of the company's management, which provides corporate performance. The actual transfer of control over the process is often accompanied by a change of directors and the general manager, which is the role of the control is transferred. But may be some state-owned listed companies in China's equity restructuring, the ultimate control of the people do not change, and result in internal control may not involve the replacement of the directors of the Company, the general manager of state-owned property rights. Therefore, our chairman of the board whether to change the dummy variables and general manager to change the dummy variables to measure the transfer of control over whether this most basic role play. (2) The chairman and general manager of individual dummy variables, board size, the proportion of independent directors. The Board of Directors is the supervisory body of the company within the company managers, and the chairman of the board to play a leading role in the operation of the Board and concurrently by the general manager, the board of directors to the supervision of the General Manager will be weakened. The larger the size of the board, may have decision-making efficiency and low cost, but of different shareholders in balance and restricting the role of the board of directors as well as the strength of the company's management can prevent the encroachment of a large shareholder of the company. Regulations, related party transactions of the company and its shareholders to form an independent opinion of the directors. The independent directors are more direct supervision of the company's largest shareholder in the company's internal power. The higher the proportion of independent directors, the more likely to prevent manipulation and behavior to obtain private benefits of large shareholders on the board of directors. (3) The Board of Directors the number of holdings, directors, supervisors and senior management total compensation. The number of holdings of the Board reflects the extent of the company supervisors and managers with the interests of the shareholders of the Company. The total compensation of directors, supervisors and senior management reflects the content of executive compensation incentives, many foreign studies have shown that executive pay is positively correlated with company performance. Due to the large stake of the controlling shareholder, the board of directors of the company is basically controlled by the controlling shareholder, the corporate governance issues more controlling shareholders and minority shareholders principal-agent problem. (4) The first of the major shareholding proportion, Herfindahl2_10. General control of large shareholders, the stake of the largest shareholder in our small beneficial to reduce the risk of major shareholders control the balance of the shareholding structure. Herfindahl2_10 is the second largest to the tenth largest shareholders the Herfindahl coefficient, is the second largest to the tenth largest shareholder equity ratio of the square and. The angle of these companies for their own interests, interested in the behavior of the controlling shareholder oversight to prevent the controlling shareholder to obtain the behavior of private gain, and to supervise the operation and management of the company. Herfindahl2_10 reflects these larger interests of shareholders and the size of the oversight power.
2.3 Data processing and testing methods
Indicator variable internal governance mechanisms for transfer of control rights in state-owned listed companies for statistical analysis. The main difference before and after the transfer of control over the means t-test, the mean differences between sub-sample t-test. Analysis of the effect of the control over the transfer of corporate governance effect, we must consider the differences in different in different sectors of the calendar year, must also consider the differences in corporate entities. Therefore, annual industry in the value of each indicator variable (dummy variables mean) adjustment. First calculated indicator variables for each of the years in the value of the sub-industry (dummy variables to the mean), industry SFC listed Company Industry Classification Standard Classification, in addition to two of the manufacturing sector Ci, the letter C, and an Arabic numeral i The rest of the industry to take a letter, a total of 21 industries. Sample of the indicator variables then subtracting the the Industry corresponding indicator variables in value (or mean).
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