Can Minority Shareholders Supervise Majority Shareholders?——Evidence from Regulatory Minority Shareholders
This paper manually collects the data of the China Securities Investor Services Center(ISC)'exercise behaviors and analyzes the effect of the regulatory minority shareholders in corporate governance,from the perspective of tunneling behavior of major shareholders.This paper finds:first,the exercise behaviors of ISC could help reduce major shareholders'tunneling.Second,it was also found that the reducing effect has been enhanced when ISC exercised rights at the scene or the exercises involved non-operating cash embezzlements and related party transactions.Furthermore,the participation of ISC led a higher attendance rate of minority shareholders in general meetings accompanied by a higher veto rate and a higher quality of internal control.Moreover,the exercise behaviors of ISC also strengthened the supervision effect of external mechanisms such as regulatory agencies,medias and analysts,which thereby reduced the tunneling.We contribute to the literature in the effect of minority shareholders on corporate governance.It provides a institution-al-innovation enlightenment and realistic basis for the reasonable construction of investor protection and the high-quality development of capital market.
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