Ownership structure and investment decisions of Chinese SOEs

He, Wei; Kyaw, NyoNyo A.

doi:10.1016/j.ribaf.2017.07.165

Cited by 55 publications

(30 citation statements)

References 40 publications

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“…They found that managerial ownership was a positive predictor of Q and that Q is a significant negative predictor of managerial ownership. He et al, (2018) found managerial ownership was a positive predictor of performance but conversely performance did not predict ownership. In contrast, using panel data, Chen et al, (2016) found that firm size has a positive relationship with firm's owned by insiders and likewise that idiosyncratic risk has a negative relationship with firms owned by insiders.…”

Section: Literature Reviewmentioning

confidence: 82%

Ownership Structure and Firm Performance

Zandi¹,

Singh²,

Mohamad³

et al. 2020

IJFR

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This study implies that diffuse ownership structure negatively affects firm performance. Our study based on empirical evidence found that the ownership structure (the outsider and the insider i.e. managerial ownership) favorably increase the firm performance. Our sample data was based on 200 Malaysian companies listed on the Malaysian stock exchange Bursa Malaysia. We used Tobin’s Q and accounting rate of return for firm performance measurement and compared it with important ownership structure and managerial ownership structure. Our results indicate that both ownership structures have a positive relationship with firm performance.

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Section: Literature Reviewmentioning

confidence: 82%

Ownership Structure and Firm Performance

Zandi¹,

Singh²,

Mohamad³

et al. 2020

IJFR

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“…The owners in state holding companies are often lack of supervision motivation to managers. And when the ultimate controller is the government, local governments will require their enterprises to achieve not only economic goals but also political and social goals such as improving employment rate [2] . It makes business investment more subject to the government's administrative intervention, which could exacerbate the over-investment.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Study on the Relationship of Ownership Structure and Over-Investment of China’s Listed Companies

Cui¹

2019

Proceedings of the 2018 6th International Education, Economics, Social Science, Arts, Sports and Management Engineering Confere

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Investment in the company's financial activities has been one of the most important subjects. With the complexity and multiplicity of factors which influence investment decision-making, investment decision-making behavior not always serve the goal of listed companies, which results in the inefficient investment especially over-investment. This paper selects the companies which listed in Shanghai and Shenzhen stock market as research sample from 2013 to 2017 year, by using the Richardson's (2006) residual model to measure the over-investment. Then three groups of multi regression analytical models have been built in three aspects which consist of the ownership concentration, the ultimate controller and the equity restriction to analyze the relationship between ownership structure and over-investment behavior. With empirical research, this paper has the following conclusions. The first majority shareholder's holding is significantly "U-shape" correlated with over-investment. Equity restriction has negative correlation with over-investment. Over-investment of state-holding listed company is more than the over-investment of non-state-holding, but is not significant.

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“…As a result, shareholders can make inefficient investment decisions such as canceling projects that benefit the company or even conducting negative NPV projects to make a profit by transferring resources to themselves or their own company [6][7][8]. This activity is called overinvestment.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Ownership Structure and Board Independence Towards Overinvestment Behavior of Family Firm in Indonesia

Pradita

Utama

2020

KSS

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Firms with concentrated ownership structures are commonly found in Southeast Asia. In Indonesia, the biggest control of the firm comes from the family. Concentrated ownership can lead to agency problem between controlling shareholders and non- controlling shareholders where, controlling shareholders together with management, can make decisions which bring personal benefit at the expense of non-controlling shareholders for example by investing on projects with negative NPV or known as overinvestment. This study explains the effect of the presence of directors and independent commissioners on relationship between family ownership and overinvestment. Using firms listed on Indonesia Stock Exchange from 2011 to 2017 as research samples, the presence of independent director is negatively related to overinvestment. From the regression results, only independent directors were found to have a moderating effect in weakening the positive relationship between family ownership and overinvestment. This effect is seen more clearly if family ownership in the company is low. This is because if family ownership in the company is low the process of selecting a board of directors can be more objective so that the possibility of a number of independent directors sitting on the board of directors is much greater. Thus the effect of moderation by independent directors will be greater in companies with lower family ownership. Keywords: ownership structure, board independence, overinvestment, corporate governance, Indonesia

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Ownership structure and investment decisions of Chinese SOEs

Cited by 55 publications

References 40 publications

Ownership Structure and Firm Performance

Ownership Structure and Firm Performance

Study on the Relationship of Ownership Structure and Over-Investment of China’s Listed Companies

The Effect of Ownership Structure and Board Independence Towards Overinvestment Behavior of Family Firm in Indonesia

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