An Empirical Study on Private Benefits of Control under China's Shareholder Structure Reform

The expropriation of the small shareholders by the large shareholders is one of the most important questions in the field of corporate governance.By measuring the private benefits of control could bring direct understanding of embezzlement level.We first measure the value of private benefits of control and then with shareholder structure reform,we evaluate the relationship between expected return of un-circulating shares and private benefits of control.The result of empirical study shows that,the private benefits of control is negatively associated with profit position,the size of the company,and balances power of shareholder;there is a positive correlation between the multiple abnormal return of un-circulating shares,the ratio of debt financing,the share proportion of transference,and the decentralization of share.No evidence shows that the size of circulating stocks can have influence on the private benefits of control.Finally,we make some suggestions to transference of state shareholder rights and corporate governance of public companies under China's shareholder structure reform.