A Study on the Relationship between the Shareholding Ratio of the Controlling Shareholders and the Capital Occupation under the Different Capital Structures

Abstract

Based on Hansen’s “threshold panel regression model” [1], this paper studies the relationship between shareholding ratio and capital occupation of listed companies in consideration of the difference of capital structure of the company, through the double threshold test method to determine the threshold value. The results show that there is a significant interval effect between the proportion of controlling shareholders and capital occupation of listed companies, but there is no “inverted U” relationship expected. The relationship between the two is due to the high ratio of assets to liabilities. And the “inverted U” relationship appears when the asset-liability ratio is low; the shareholding ratio of the controlling shareholder of the listed company is negatively correlated with the capital occupation, and when the asset-liability ratio is high, the two are positive related. We analyze the above-mentioned results from the cost and motivation of controlling shareholders of listed companies in China, and put forward some policy suggestions for listed companies, the main creditor banks and the regulators.