Do Multiple Large Shareholders Collude? Empirical Evidence from Chinese Family Firms' Investment Inefficiency

Abstract

Abstract:

This paper investigates the collusion of multiple large shareholders in Chinese family firms. We study the influence of shareholders' collusion on investment efficiency using the data from 2003 to 2012 of Chinese family firms. This paper finds that shareholders' collusion can lead to firm's investment inefficiency, such as overinvestment and underinvestment. Compared with underinvestment, firms with large shareholders' collusion are more prone to overinvestment. Unlike prior literature that focuses merely on the agency problems of management or controlling shareholders, this study provides evidence of the agency problem of multiple large shareholders. By examining the effect of the relation and allocation of shareholders ownership, we provide shareholders' collusion, a new theoretical perspective, to explain the investment inefficiency in Chinese family firms.

Key words: shareholders' collusion, investment inefficiency, shareholders' relationship, shareholders' balancing

Lyu Huaili, Li Wanli. Do Multiple Large Shareholders Collude? Empirical Evidence from Chinese Family Firms' Investment Inefficiency[J]. , 2015, 27(11): 107-117,191.

References

[1] Attig N., El Ghoul S., Guedhami O., Rizeanu S. The Governance Role of Multiple Large Shareholders:Evidence from the Valuation of Cash Holdings[J]. Journal of Management and Governance, 2013,17(2):419-451
[2] 刘慧龙,陆勇,宋乐.大股东"隧道挖掘":相互制衡还是竞争性合谋——基于"股权分置"背景下中国上市公司的经验研究[J].中国会计评论, 2009,15(1):97-112
[3] Cho M. H. Ownership Structure, Investment, and the Corporate Value:An Empirical Analysis[J]. Journal of Financial Economics, 1998,47(1):103-121
[4] 申慧慧,于鹏,吴联生.国有股权、环境不确定性与投资效率[J].经济研究, 2012,(7):113-126
[5] Boyle G. W., Guthrie G. A. Investment, Uncertainty, and Liquidity[J]. The Journal of Finance, 2003,58(5):2143-2166
[6] Yeh Y. H., Lee T., Shu P. G. The Agency Problems Embedded in Firm's Equity Investment[J]. Journal of Business Ethics, 2008,79(1-2):151-166
[7] 魏明海,程敏英,郑国坚.从股权结构到股东关系[J].会计研究, 2011,(1):60-67
[8] Tirole J. Hierarchies and Bureaucracies:On the Role of Collusion in Organizations[J]. Journal of Law, Economics and Organization, 1986,2(2):181-214
[9] Tirole J. Collusion and the Theory of Organizations[M]//Advances in Economics Theory:Proceedings of the Sixth World Congress of the Econometric Society. Cambridge:Cambridge University Press, 1992
[10] 董志强,蒲勇健.掏空、合谋与独立董事报酬[J].世界经济, 2006,(6):71-83
[11] 严也舟.外部治理环境、内部治理结构与合谋侵占实证分析[J].管理评论, 2012,24(4):28-35
[12] Maury B., Pajuste A. Multiple Large Shareholders and Firm Value[J]. Journal of Banking & Finance, 2005,29(7):1813-1834
[13] Sauerwald S., Peng M. W. Informal Institutions, Shareholder Coalitions, and Principal-Principal Conflicts[J]. Asia Pacific Journal of Management, 2013,30(3):853-870
[14] Cheng M. Y., Lin B. X., Wei M. H. How Does the Relationship between Multiple Large Shareholders Affect Corporate Valuations? Evidence from China[J]. Journal of Economics and Business, 2013,70(11-12):43-70
[15] 陈建林.利他主义、代理成本与家族企业成长[J].管理评论, 2011,23(9):50-57
[16] Myers S. C., Majluf N. S. Corporate Financing and Investment Decisions When Firms Have Information That Investors Do Not Have[J]. Journal of Financial Economics, 1984,13(2):187-221
[17] Gilchrist S. H., Himmelberg C. P. Evidence on the Role of Cash Flow for Investment[J]. Journal of Monetary Economics, 1995,36(3):541-572
[18] Kadapakkam P. R., Kumar P. C., Riddick L. A. The Impact of Cash Flows and Firm Size on Investment:The International Evidence[J]. Journal of Banking and Finance, 1998,22(3):293-320
[19] Pindadao J., Requejo I., Torre C. Do Family Firms Use Dividend Policy as a Governance Mechanism? Evidence from the Euro zone[J]. Corporate Governance:An International Review, 2012,20(5):413-431
[20] 何小杨.我国家族企业中的"人际关系网"——现状及制度诱因[J].证券市场导报, 2011,(11):54-66
[21] 连燕玲,贺小刚,张远飞.家族权威配置机理与功效——来自我国家族上市公司的经验证据[J].管理世界, 2011,(11):105-117
[22] Richardson S. Over-investment of Free Cash Flow[J]. Review of Accounting Studies, 2006,11(2-3):159-189
[23] Jensen M. C. Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers[J]. American Economic Review, 1986,76(2):323-329
[24] Billett M. T., Garfinkel J. A., Jiang Y. The Influence of Governance on Investment:Evidence from a Hazard Model[J]. Journal of Financial Economics, 2011,102(3):643-670
[25] Almeida H. V., Wolfenzon D. A Theory of Pyramidal Ownership and Family Business Groups[J]. The Journal of Finance, 2006,61(6):2637-2680
[26] 魏志华,吴育辉,李常青.家族控制、双重委托代理冲突与现金股利政策——基于中国上市公司的实证研究[J].金融研究, 2012,(7):168-181
[27] Milnor J. W., Shapley L. S. Values of Large Games, II:Oceanic Games[J]. Mathematics of Operations Research, 1978,3(4):290-307
[28] 靳庆鲁,孔祥,侯青川.货币政策、民营企业投资效率与公司期权价值[J].经济研究, 2012,(5):96-106