Abstract Using Shapley-Shubik Power Index method established by Shapley and Shubik, and by the data of listed companies in China’s main board market from 2001 to 2017, this studymeasures the real control right of the major shareholder of Chinese listed companies, and examinesthe impact of control right of the major shareholder on corporate fraud with the Bivariate Probit model. We find that the control right of the major shareholder is negatively and significantly related to fraud propensity, and is positively and significantly related to fraud detection. Further, this studydivides corporate fraud into company executive fraud and company shareholder fraud, and finds that the control right of the major shareholder is negatively and significantly related to company executive fraud propensity, and is positively and significantly related to company executive fraud detection, but is negatively and significantly related to company shareholder fraud detection.
