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Retained state shareholding in Chinese PLCs: Does government ownership always reduce corporate value?

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Author Info
Tian, Lihui
Estrin, Saul

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Abstract

Government ownership of enterprises in China remains substantial. In this paper, we use a large data set of Chinese public listed companies between 1994 and 2004 to generate evidence on how government ownership influences company performance. We find the effect of government ownership on corporate value to be non-monotonic. In fact, the relationship is U-shaped; up to a certain threshold, corporate value decreases as government shareholding increases, but beyond this it increases. When its shareholding is large, the government can actually improve corporate value. We interpret this result in terms of ownership concentration and government partiality. Journal of Comparative Economics 36 (1) (2008) 74-89.

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Publisher Info
Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 36 (2008)
Issue (Month): 1 (March)
Pages: 74-89
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Handle: RePEc:eee:jcecon:v:36:y:2008:i:1:p:74-89

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Web page: http://www.elsevier.com/locate/inca/622864

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  1. Yakovlev, Andrei, 2009. "State-business relations and improvement of corporate governance in Russia," BOFIT Discussion Papers 26/2008, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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This page was last updated on 2009-12-3.


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