An Empirical Examination of Endogenous Ownership in Chinese Private Enterprises
AbstractThere is debate over the relationship between ownership structure and firm performance. Most existing studies look at established listed companies in developed countries, in which the market mechanism is well developed. Meanwhile, the relationship between ownership structure and firm performance in small and medium enterprises (SMEs) in transition countries has been largely ignored. Drawing on endogenous ownership theory, this paper explores the impact of ownership structure on firm performance in SMEs in the context of an embryonic market environment. Using survey data for private firms in Shantou City, China, we find that ownership variables do not have a statistically significant relationship with firm performance. We examine the determinants of changing ownership shares and find that firm size and business instability are related to changes in ownership shares. Our findings support the central tenets of endogenous ownership theory and reveal factors that may lead to the change of ownership structure among SMEs in an emerging market.
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Bibliographic InfoPaper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 38-12.
Length: 24 pages
Date of creation: Sep 2012
Date of revision:
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Postal: Department of Economics, Monash University, Victoria 3800, Australia
Web page: http://www.buseco.monash.edu.au/eco/
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Find related papers by JEL classification:
- 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
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-30 (All new papers)
- NEP-BEC-2012-09-30 (Business Economics)
- NEP-TRA-2012-09-30 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
- Barth, Erling & Gulbrandsen, Trygve & Schonea, Pal, 2005. "Family ownership and productivity: the role of owner-management," Journal of Corporate Finance, Elsevier, vol. 11(1-2), pages 107-127, March.
- McConnell, John J. & Servaes, Henri, 1990. "Additional evidence on equity ownership and corporate value," Journal of Financial Economics, Elsevier, vol. 27(2), pages 595-612, October.
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