关键词: 股权集中, 非完备市场, 资本结构, 投资者保护

Abstract: The existing theoretical researches of the controlling shareholder's occupation behavior are almost based on the assumption of complete markets. However, numerous empirical studies have documented that controlling shareholders often face undiversifiable idiosyncratic risks because active businesses account for a large fraction of their total wealth. Especially, the lack of investor protection and highly concentrated ownership structure entrench under-diversified controlling shareholders are fundamental characteristics in Chinese corporations. On the other hand, there are few theoretical researches pay close attention to the influential mechanism between controlling shareholder's occupation behavior and capital structure choice. Motivated by both the realistic background and micro-theory, this paper aims to study the impact of controlling shareholder's control rights, cash-flow rights, and the deviation of these two rights on firm value and capital structure decisions from the perspective of incomplete markets. Then the inherent influential mechanism of controlling shareholder's occupation behavior is explored. This objective is achieved by using numerical simulation and static comparative analysis. The results show that, controlling shareholder's occupation behavior results in conservative debt financing but default earlier relative to the first best benchmark. Compared to the case of complete markets, controlling shareholder's occupation behavior leads to more distortions on capital structure decisions, and thus lower firm value and larger social welfare loss under incomplete markets. In particular, It is found that cash flow rights have a negative effect on firm value. It means that higher cash-flow rights are not a natural way to provide proper incentives for the controlling shareholder. This predicted result differs from the case of complete markets, but provides theoretical basis for the related empirical evidence. Finally, according to the effective conclusions in this paper, it is argued that there are effective approaches to reduce inefficient decision-making (conservative debt and default earlier) arising from controlling shareholder's occupation behavior, and the approaches include improving the legal protection of investors, reducing controlling shareholder's total wealth risk exposure and the deviation of two rights. Therefore, our analysis provides theoretical and practical guiding significance for the governance problem of the firms with highly concentrated ownership.

Key words: ownership concentration, incomplete markets, capital structure, investor protection