A Study on the Relationship between Ownership Structure and Financial Risk in Chinese Manufacturing Companies

다국어 초록 (Multilingual Abstract)

In recent years, listed companies have been caught in financial crisis and even declared bankruptcy because of ignoring financial risks in pursuit of economic benefits. There are many factors that affect the financial risk of a company, such as irrational guarantee, managers' ethical problems, adverse selection and improper related transactions. By analyzing these factors, we can find that the unreasonable ownership structure influences the overall structure of the company from the root. It is the main reason for the company that generates financial risks. Therefore, the paper studies the relationship between the ownership structure and financial risks in Chinese manufacturing companies. Based on the theories of ownership structure and financial risk, the article firstly selects 1377 listed manufacturing companies from 2011 to 2017. And then from the four dimensions of ownership concentration, equity balance, equity liquidity, type of shareholders, it puts forward the research hypotheses and builds regression model. The statistical analysis method is used to describe the relationship of the ownership structure and financial risk. Finally, descriptive statistics, correlation analysis and regression analysis were conducted on the relationship of the two. The empirical results show that the relationship between ownership concentration and financial risk is significantly positive. Equity balance is negatively correlated with financial risk. The equity liquidity is not significantly negative correlated with financial risk. The type of shareholders is positively correlated with the level of financial risk.

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