Artikel

Corporate governance mechanisms, ownership and firm value: Evidence from listed Chinese firms

This study analyzes corporate ownership as a corporate governance mechanism and its role in creating firm value. Previous research shows that there is no convergence on the firm-value corporate ownership relationship. Most research in this area takes a cross national approach ignoring the uniqueness of each institutional setting particularly those of emerging nations. Using a unique firm level dataset, we investigate how corporate control nature and ownership concentration affect the value of Chinese listed firms. First, non-state owned control is associated with a higher Tobin's Q while a negative premium is found for state owned. Using the hybrid and the correlated random effects model we confirm a U-shaped non-linear relationship between ownership concentration and Tobin's Q, implying that firm value first decreases and then increases as block holders own more shares. Further investigation reveals that the negative effect of ownership concentration is weaker when a firm equity nature is non-state owned enterprises (non-SOEs) compared to state-owned enterprises (SOEs). While ownership concentration appears to be an efficient mechanism for corporate governance its effect is weaker for SOEs compared to non-SOEs. The results support privatization of SOEs, sound reforms such as the split share structure reform as crucial for the development of China's stock market.

Language
Englisch

Bibliographic citation
Journal: International Journal of Financial Studies ; ISSN: 2227-7072 ; Volume: 8 ; Year: 2020 ; Issue: 2 ; Pages: 1-26 ; Basel: MDPI

Classification
Wirtschaft
Subject
block holder ownership
Chinese listed firms
corporate governance
emerging economies
firm value
ownership concentration

Event
Geistige Schöpfung
(who)
Kong, Yusheng
Famba, Takuriramunashe
Chituku-Dzimiro, Grace
Sun, Huaping
Kurauone, Ophias
Event
Veröffentlichung
(who)
MDPI
(where)
Basel
(when)
2020

DOI
doi:10.3390/ijfs8020020
Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Artikel

Associated

  • Kong, Yusheng
  • Famba, Takuriramunashe
  • Chituku-Dzimiro, Grace
  • Sun, Huaping
  • Kurauone, Ophias
  • MDPI

Time of origin

  • 2020

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