Ownership Concentration of Rural Mutual Fund Affect Its Operation Efficiency?

Rural mutual fund cooperatives play an increasingly important role in promoting the development of rural finance. This paper uses DEA Malmquist index to measure the operation efficiency of rural mutual fund cooperatives, anddiscusses the impact of ownership concentration on their operation efficiency. The results show that the impact of equity concentration on the operation efficiency of rural mutual fund cooperatives is an inverted U-shaped curve. When the equity concentration is between 47% and 52%, the operation efficiency of rural mutual fund cooperatives is the most effective, and the equity control of sponsors can better guarantee the operation efficiency. When the equity concentration is lower than 47%, the improvement of the sponsor's control ability is conducive to improving the operation efficiency, which mainly shows as the improvement of the fund decision-making efficiency. When the sponsor’s equity concentration is higher than 52%, with the improvement of the sponsor's control ability, the operation efficiency declines, which shows as the reduction of capital utilization efficiency caused by the “elite capture” within the cooperative. Therefore, it is necessary to optimize the scale and shareholding ratio of equity controlled by the promoters of rural mutual fund cooperatives, guide their equity structure adjustment, and encourage new agricultural business entities and private capital to optimize their operation efficiency.