Corporate governance and firm value during the global financial crisis: Evidence from China
AbstractWe find that Chinese state-owned enterprises (SOEs) that performed poorly before the global financial crisis performed better during the crisis, especially when they relied on bank debt. This suggests that state ownership mitigates financial constraints during times of financial crisis. Large shareholders' ownership has a U-shaped relation to crisis-period performance, which suggests ownership concentration mitigates financial constraints and engenders expropriation problems. We also find that managerial ownership is positively associated with crisis-period performance of SOEs. This result suggests that managerial ownership mitigates expropriation problems in SOEs. Finally, Chinese firms that adopted a reputable accounting auditor experienced a small reduction in firm value during the global financial crisis.
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Bibliographic InfoArticle provided by Elsevier in its journal International Review of Financial Analysis.
Volume (Year): 21 (2012)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/inca/620166
Financial crisis; Corporate governance; State-owned enterprises; Managerial ownership; China;
Find related papers by JEL classification:
- G01 - Financial Economics - - General - - - Financial Crises
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
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