The Relationship between Ownership Structure and Performance of the Private Listed Companies in China

In order to examine the relationship between ownership structure and firm performance of private companies, this paper selects 283 private companies listed in Two Exchanges in the period from 2008 to 2010. Ownership structure is described in two aspects: ownership concentration and equity properties. First, a new comprehensive performance index is obtained by principal component analysis method based on the financial indexes. Then the paper makes linear regression analysis of that new performance index and ownership structure. Empirical findings suggest that most of the sample companies are controlled by top five shareholders especially the first major shareholders; appropriate ownership concentration may benefit firm performance. Compared to the literature, we find that different from state-owned companies, the proportion of shares held by state or corporate has no significant effects on firm performance of private listed companies; tradable shareholders play almost no governing effect which has no change before or after nontradable shares reform.