Family-concentrated ownership in Chinese PLCs: Does ownership concentration always enhance corporate value?

Artikel

In this paper we investigate the relationship between family ownership structure and corporate value across a sample of 1314 firm-year observations of China's family publicly listed companies (PLCs), from 2004 to 2008. We find a significant inverse-U-shaped relationship between the controlling family's ultimate cash-flow rights and corporate value; as measured by Tobin's Q. That is, as family-ownership concentration increases, corporate value first increases and then decreases. This finding refreshes our understanding of the relationship between family-ownership concentration and corporate value in emerging economies such as found in China. We corroborate prior findings that when controlling families hold excess control over cash-flow rights, corporate value is significantly lowered, while multiple large shareholders structure is significantly associated with higher corporate value. In addition; board independence is found to significantly improve corporate value in the context of family-concentrated ownership. We also test for potential endogeneity between family ownership and corporate value and find our results to be robust.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: International Journal of Financial Studies ; ISSN: 2227-7072 ; Volume: 2 ; Year: 2014 ; Issue: 1 ; Pages: 103-121 ; Basel: MDPI

Classification and Topics

• Classification: Wirtschaft
• Subject: China ; corporate value ; family concentrated ownership ; family firms ; ultimate ownership structure

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Luo, Jin-hui ; Liu, Heng
• Event: Veröffentlichung
• (who): MDPI
• (where): Basel
• (when): 2014

Further information

• DOI: doi:10.3390/ijfs2010103
• Handle: http://hdl.handle.net/10419/103578
• Last update: 10.03.2025, 11:45 AM CET