Ultimate Shareholders, Cash Flow Rights, Controlling Rights and Corporate Performance

This paper, with a firm-level dataset of private listed companies in Shanghai stock markets from 2004-2008 based on ultimate shareholder´s views, examines the effects of ultimate shareholder´s controlling rights, cash flow rights and the separation between controlling rights and cash flow rights on corporate performance and capital structure. The paper tries to give some suggestions on the improvement of corporate governance structure and interests protection of minority shareholders in China. We find that: (1) The higher the ultimate controlling shareholder´s cash flow rights, the better the corporate performance. (2) The higher ultimate shareholder´s controlling right, the worse the performance of the company. (3) The higher the degree of ultimate shareholder´s over-control, the worse the performance of the company.