Pyramidal Structure, Legal Environment and Excessive Benefits of Control: Evidence from Chinese Listed Companies

摘要

The paper by examing the control transactions during 2005 to 2007 in Shanghai and Shenzhen securities market, finds the excessive benefits of control are positively related to the length of the business pyramidal chain, in other words, the lower level the listed company situates in a pyramidal structure, the more expropriation the controlling shareholder extracts. And the legal protection is negative related to the excessive benefits of control. The enlightenment to us is that shortening control chain and simplify the control structure can curb the extraction of ultimate controllers, which is in alignment with the refocusing strategy. And better legal protection is important. We also find the presence of other block shareholders can reduce the excessive benefits of control.