There are a few studies on the relation between the control contestability and performance, but the results are mixed. With the data of 1378 listed company in China during 2000-2007, the paper analysis the impacts of control contestability on performance using 5 ownership restricting indexes. It shows that the degree of ownership restricting is greater, the net profit is better, and Tobin's Q is lower. Moreover, the restricting of the second large shareholder against the largest shareholder has incentive and tunneling effect, and the impacts of the ownership restricting on net asset per share also has the two effects. These results may be helpful to recognize the influence of ownership restricting further, and they also supply conferences to the designing optimal ownership structure.
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