Abstract: With the completion of nontradable shares reform, the ultimate controller′s encroachment on the interests of minority shareholders and listed companies shows a lot of different characteristics compared with the share structure before the reform. Based on balance panel data of 343 listed family companies which have been continuously operating during the Post-Non-Tradable Share Period of 2008-2014, the paper uses individual fixed effects regression model to study the relationship between ultimate control rights, cash flow right, the separation of two rights, equity balance, control layer and tunneling effect, finding the effects of various factors on the tunneling effect show significant differences in different family companies;tunneling effect is in significantly positive correlation with the proportion of control rights and the separation of two rights, while is in significantly negative correlation with cash flow right;the existence of outside shareholders can′t effectively curb the tunneling behavior, and low debt assets structure encourages the tunneling incentive. Therefore, it is necessary to construct the ownership structure with low control right and low cash flow right to avoid the tunneling behavior from the power source.

Key words: Pyramid shareholding structures, separation of two rights, family control, tunneling behavior, fixed effect