The Empirical Research of Controlling Shareholders' Propping: Based on the Relevant Provisions of the System about "Delisted Warning Companies" and "Suspending Listing Companies"

This paper selects the listed companies in Shanghai and Shenzhen market as samples which deficit only one year since 2005. According to the years of sustained losses in the subsequent years, these samples can be divided into "companies facing delisted warning"(1,2) and "companies suspending listing"(3). Then this paper analyzes and researches the propping of controlling shareholders by paired analysis. The empirical research not only proves the objective existence of controlling shareholders' propping, but also research variables influence on controlling shareholders' propping differently between this two types of companies. The research results suggest that if the listed companies controlled by government, especially by local government, the higher the proportion of the largest shareholder is, the higher the proportion of the employment rate is, and the better the government environment is, then the higher level of propping the controlling shareholders will be. Especially, when listed companies facing "suspending listing", the effect of these variables on controlling shareholders' propping will be more notable than that of companies facing delisted risk warning.