Does the type of ownership control matter? Evidence from China’s listed companies

Chen, Gongmeng; Firth, Michael; Xu, Liping

doi:10.1016/j.jbankfin.2007.12.023

Cited by 527 publications

(382 citation statements)

References 22 publications

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“…Almost all firms on the GEM Board are under the control of private investors or firms, whereas the majority of firms on the main board are under control of the government at the central or local level (Chen et al 2009;Li et al 2011). Most of the main board listed firms are carve-outs or spin-offs from existing state-owned enterprises (SOEs) (Jiang et al 2010), whereas GEM firms are typically entrepreneurial firms under the control of their founders.…”

Section: The Chinese Growth Enterprises Market Boardmentioning

confidence: 99%

“…In GEM firms, founding entrepreneurs and senior executives typically retain a significant percentage of shares on stock market flotation, which can potentially reduce principal-agent conflicts (Jensen and Meckling 1976). Typically, the percentage of stock owned by executives and board members is much lower for firms listed on the main board in China, especially for government-controlled firms (Chen et al 2009;Jiang et al 2010). …”

Section: The Chinese Growth Enterprises Market Boardmentioning

confidence: 99%

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Capital structure of Chinese listed SMEs: an agency theory perspective

2016

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Prior work examining the antecedents of capital structure for small and medium-sized enterprises in emerging markets is limited. This paper sheds light on how the corporate governance mechanisms adopted by firms on the newly established Growth Enterprise Market (GEM) in China influence their use of debt. We find that the financial leverage of GEM firms is positively influenced by executives' shareholding and their excess cash compensation. Ownership concentration appears to reduce leverage, whereas the percentage of tradable shares increases leverage. In contrast, institutional investors' shareholding does not influence the level of debt. Traditional factors such as tax and operating cash flow are insignificant in explaining the debt levels among GEM firms.

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Section: The Chinese Growth Enterprises Market Boardmentioning

confidence: 99%

Section: The Chinese Growth Enterprises Market Boardmentioning

confidence: 99%

Capital structure of Chinese listed SMEs: an agency theory perspective

2016

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“…Indeed, government ownership is represented by various entities such as government agencies (the state asset management bureau at various levels), state asset holding/management companies, and SOEs. By tracing the identity of the ultimate controller, Chinese listed companies can be grouped into SOEs controlled by state asset management bureaus (SAMBs), SOEs affiliated to the central government, and SOEs affiliated to the local government (Chen, Firth, and Xu, 2009). …”

Section: The Ownership Structure In Privatised Soesmentioning

confidence: 99%

“…Specifically, managerial ownership, foreign ownership, and employee ownership represent less than 2% of the outstanding shares, and so they do not constitute major voting blocks (Chen, Firth, and Xu, 2009). Regarding managerial ownership, for a sample of 5,284 publicly traded Chinese firms, Wei et al (2005) report an average stock holding of only 0.015% by senior managers and directors for partially privatised SOEs.…”

Section: Ownership and Earnings Managementmentioning

confidence: 99%

Structural Changes in the Chinese Stock Market: A Review of Empirical Research

2014

China Account Financ Rev

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China’s stock market has gone through major structural changes since its inception in the early 1990s. In this survey article, we review the empirical literature published in 15 leading accounting and finance journals from 1998 to 2013 that documents these important structural changes. In analysing this literature, we focus on the ‘distinctiveness’ of the Chinese stock market compared with developed stock markets (e.g. US) and the research opportunities generated by the China setting. Key themes include China’s share issue privatisation (SIP) reforms, the political connections in privately owned companies, the characteristics of Chinese listed companies and their governance, the regulatory environment reforms in China, and the evolving role played by auditors and other information intermediaries.

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“…Finally, we contribute to the growing body of work on corporate governance in China (Sun and Tong (2003), Cull and Xu (2005), Allen, Qian and Qian (2005), Wei, Xie and Zhang (2005), Fan, Wong and Zhang (2005)-especially the group of studies that have abandoned the "official" ownership scheme, which classifies owners of non-tradable shares primarily into two categories-State Shares and Legal-Person Shares-in favor of classifications based upon the identity of the ultimate owner (Firth, Fung and Rui (2006), Fu (2007, 2009) , Chen, Firth and Xu (2009)). …”

Section: Introductionmentioning

confidence: 99%

Political Connections and Minority-Shareholder Protection: Evidence from Securities-Market Regulation in China

Berkman¹,

Cole²,

Fu³

2010

J. Financ. Quant. Anal.

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Abstract:We examine the wealth effects of three regulatory changes designed to improve minority-shareholder protection in the Chinese stock markets. Using the value of a firm's related-party transactions as an inverse proxy for the quality of corporate governance, we find that firms with weaker governance experienced significantly larger abnormal returns around announcements of the new regulations than did firms with stronger governance. This evidence indicates that securities-market regulation can be effective in protecting minority shareholders from expropriation in a country with weak judicial enforcement. We also find that firms with strong ties to the government did not benefit from the new regulations, suggesting that minority shareholders did not expect regulators to enforce the new rules on firms where block holders have strong political connections.JEL classifications: G32, G34, G38

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Does the type of ownership control matter? Evidence from China’s listed companies

Cited by 527 publications

References 22 publications

Capital structure of Chinese listed SMEs: an agency theory perspective

Capital structure of Chinese listed SMEs: an agency theory perspective

Structural Changes in the Chinese Stock Market: A Review of Empirical Research

Political Connections and Minority-Shareholder Protection: Evidence from Securities-Market Regulation in China

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