The helping hand, the lazy hand, or the grabbing hand? Central vs. local government shareholders in publicly listed firms in China
AbstractWe analyze related party transactions between Chinese publicly listed firms and their stateowned enterprise (SOEs) shareholders to examine whether companies benefit from the presence of government shareholders and politically connected directors appointed by the government. We find that related party transactions between firms and their government shareholders seem to result in expropriation of the minority shareholders in firms controlled by local government SOEs or with a large proportion of local government affiliated directors on their board, and in provinces where local government bureaucrats are less likely to be prosecuted for misappropriation of state funds. On the other hand, firms controlled by the central government (or with a large proportion of central government affiliated directors) are benefited in their related party transactions with their central government SOEs.
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Bibliographic InfoPaper provided by Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University in its series CEI Working Paper Series with number 2008-11.
Length: 31,  p.
Date of creation: Apr 2008
Date of revision:
Note: February 2008
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Law and economics; Government ownership; China; State-Owned Enterprises (SOE); Related party transactions; Political connections;
Find related papers by JEL classification:
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-10 (All new papers)
- NEP-CDM-2008-05-10 (Collective Decision-Making)
- NEP-CFN-2008-05-10 (Corporate Finance)
- NEP-CNA-2008-05-10 (China)
- NEP-DEV-2008-05-10 (Development)
- NEP-LAW-2008-05-10 (Law & Economics)
- NEP-PBE-2008-05-10 (Public Economics)
- NEP-TRA-2008-05-10 (Transition Economics)
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