While China had been vigorously pursuing economic reform since the late 1980s, it wasn't until the 2005-2006 time period that non-tradable stock reform took place. The case of Hunan Valin Steel provides a rich look inside about the dynamics of the non-tradable share reform in China, and demonstrates the impact of good financial design helping the company to turn aside the financial distress, while minimizing costs to benefit the stockholders. Moreover, this case provides an illustration of the challenges posed by agency problems in China, with conflicted interests between tradable shareholders (public investors) on one hand and non-tradable shareholders (governments and state-owned enterprises) on the other. Not only does the split share structure result in conflicted interests and asymmetric information between managers and owners, but it also made it difficult to establish effective corporate governance.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.