Can multiple major shareholders reduce the probability of listed firms receiving inquiries from stock exchanges? Evidence from China

Abstract

Taking the Chinese A-share listed firms (2015–2020) as the research object, this study examines the impact of the presence of multiple majority shareholders (MMS) on the probability of stock exchanges inquiries (PSEI) and its mechanism. We show that the MMS can increase probability of PSEI. The mediating test shows that MMS increases PSEI by reducing the quality of internal control. Besides, a favorable information and legal environment can reduce MMS's impact on PSEI, and independent directors fail to function as supervisors and consultants.