Foreign Investors and Large Shareholders Expropriation: An Empirical Study Based on Listed Companies in China

Based on the data of listed companies through 2006-2011 of Shanghai and Shenzhen Stock markets, this study empirically examines the restriction effect on the controlling shareholders of listing corporation in China by different types of foreign shareholders. We find that the foreign shareholders on the whole can not effectively restrain the expropriation of large shareholders, and different types of foreign shareholders have significantly different effects on the restriction of expropriation of controlling shareholders. QFII and foreign funds can inhibit the expropriation of controlling shareholders to some extent, while shareholders of foreign banks, insurance companies and securities companies have no significant influence on the expropriation of controlling shareholders, which can not supervise and restrict the controlling shareholders of the listing companies, sometimes even weakened the conflicts between the controlling shareholders and the miner shareholders of the listed companies.