Ownership arrangement, risk of tunneling and investor protection-based on the empirical evidence of listed company financing

Based on the financing scale data of Chinese listed companies, this article made an empirical analysis of the relationship between ownership arrangement and risk of tunneling, and drew some relevant conclusions. Compared with the SOEs, the risk of tunneling is higher in private listed companies, and therefore the financing scales were notably higher than the former. The higher proportion of shares the controlling shareholder has, the smaller the motivation of tunneling is, resulting in the lower financing scale of listed companies. If the counterbalance ability of other large shareholders is strong, it is less possible for the controlling shareholder to tunnel the listed companies, thus the financing scale of listed companies is lower. We find that investor protection plays an important role in reducing the risk of tunneling.