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Indexed by:会议论文

Date of Publication:2012-08-01

Page Number:1-9

Key Words:Ultimate Controller;Control Rights;Cash Flow Rights;Entrenchment Effect

Abstract:Current research confirms the existence of ultimate controller in the listed private companies, and the ultimate controller can make good use of the covert channel to get access to private benefits. First of all, this paper analyses the controllers’ motive and reason to expropriate minority shareholders from the perspective of deviated control right and cash flow right . Then, based on the separation of control rights and cash flow rights, we establish the dynamic revenue model, and use mathematical method to deduce the hypothesis. Finally, this paper verifies the relationship between the control rights, cash flow rights and entrenchment effect with the data from 2007 to 2009. The results show that the related party transaction is an important way of expropriation behavior, and the separation between the two rights is convenient to do that. What’s more, the control rights have strong entrenchment effect, on the contrary the cash flow rights reflect propping effect. And the motive to gain private benefits increases with the separation degree of the two rights. r