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中國股權分置改革對於最終控制股東與關係人交易之關係的影響
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characteristics of Chinese firms, such investment could be highly risky and they could suffer
a huge loss. To help alleviate this type of problem, this study investigates whether controlling
shareholders are prone to extract private benefits through related party transactions. Our
study has implications for both policy makers and investors. For policy makers in other
emerging markets like China, privatization is only the first step to enhance the stock market.
The key point is to implement the transfer of control from the state to other types of
shareholders. In this case, corporate governance mechanisms can be enhanced and the
diversion of corporate resources can be restricted. In emerging markets like China’s,
investors should focus on the identity of the controlling shareholders of the target company
because different types of controlling shareholders have different motives and abilities to
conduct related party transactions, which could impact investors’ wealth. In addition,
investors should not rely too heavily on the monitoring efficiency of institutional investors in
China because these institutional investors may lack the experience or capability to monitor
management in the same way as in other countries.
Like most studies of this nature, this paper has some limitations. First, the impact of the
split-share structure reform on the motives of the controlling shareholders to expropriate
minority shareholders could also be scrutinized from the viewpoint of external governance
mechanisms. Whether an increase in stock liquidity results in a more active takeover market
and thereby reduces the motivation of the controlling shareholders to expropriate minority
shareholders’ benefits remains unclear. Second, the extant literature does not examine
whether different types of the controlling shareholders prefer different kinds of related party
transactions. Consequently, follow-up studies can follow the line of thought initiated in this
paper and investigate the impact of the takeover market on related market transactions after
split-share structure reform or study the preference for the kind of related party transactions
by different types of controlling shareholders, to help investors better understand the firm
characteristics in China.
5. Originality/Contribution
Compared to the previous literature on related party transactions, this study considers
the exogenous impact of institutional reform (split share structure reform), an area seldom
mentioned in previous studies (Cheung et al., 2009; Peng et al., 2011; Liu et al., 2014). In
addition, most past studies have focused on the impact of the reform on the volatility of the
stock market or extended issues of price announcements; few studies have made
comparisons between pre- and post-reform periods, which can affect corporate decisions