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Negotiation Advantage,Benefits of Control and Ratio of Initial Shareholding of Large Shareholders
Author(s): 
Pages: 44-62
Year: Issue:  2
Journal: Finance & Trade Economics

Keyword:  Negotiation AdvantageBenefits of ControlVillage BanksLarge ShareholdersRatio of Initial Shareholding;
Abstract: Based on the theory of corporate governance and the analysis of game theory,this paper introduces the extended Nash negotiation model,from the negotiation advantage and the control benefit,analyzing the differences between the initial holding proportion of the substantial shareholder and the existing research.And then use the data of China’s 865 villages and towns banks to test the theory model and the hypothesis.It found that at the creation stage of the village bank the substantial shareholder has the advantage of using negotiations,the substantial shareholders are prone to increase the proportion of initial ownership.The increase of control income has the inhibitory effect on it,and the stronger the dominant shareholder’s negotiation advantage is,the more obvious this inhibitory effect is,but it does not change the basic shareholder’s pursuit of higher initial shareholding proportion trend.However,from the perspective of the development of village banks,substantial shareholders should reduce the proportion of initial holdings,especially in the case of higher control benefits and lower negotiating advantages,at least should not exceed their negotiating advantages.The article not only directly supports the policy of reducing the initial proportion of the substantial shareholder of the rural bank,but also puts forward the suggestions to perfect the equity structure of the rural bank.And it also innovates the research of the formation mechanism of the stock ownership structure of the company and perfects and deepens the existing research.
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