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Government Shareholding and the Value of China's Modern Firms


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  • Lihui Tian


This paper documents the ultimate shareholding structures of 826 corporations listed on China's stock market and finds large equity holdings of the government. Using a panel data set, this paper further finds that corporate value decreases with an increased size of government shareholding when the government is a small shareholder. When the government equity holding is sufficiently large, corporate value increases with increased government shareholding. This U-shaped relationship between government shareholding and corporate value is interpreted by the aggregated impacts of the grabbing and helping hands of the government shareholder.

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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 395.

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Length: pages
Date of creation: 01 Apr 2001
Date of revision:
Handle: RePEc:wdi:papers:2001-395

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Keywords: ownership structure; government shareholding; corporate governance;

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Cited by:
  1. Yuan Chen & Michael Young, 2010. "Cross-border mergers and acquisitions by Chinese listed companies: A principal–principal perspective," Asia Pacific Journal of Management, Springer, Springer, vol. 27(3), pages 523-539, September.
  2. Amy Kam & David Citron & Gulnur Muradoglu, 2010. "Financial distress resolution in China – two case studies," Qualitative Research in Financial Markets, Emerald Group Publishing, Emerald Group Publishing, vol. 2(2), pages 46-79, October.
  3. Huyghebaert, Nancy & Quan, Qi, 2009. "Share issuing privatizations in China: Sequencing and its effects on public share allocation and underpricing," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 306-320, June.
  4. Kurt Hess & Abeyratna Gunasekarage & Martin Hovey, 2010. "State-dominant and non-state-dominant ownership concentration and firm performance: Evidence from China," International Journal of Managerial Finance, Emerald Group Publishing, Emerald Group Publishing, vol. 6(4), pages 264-289, September.
  5. Homayara Latifa Ahmed & Md. Jahangir Alam & Saeed Alamgir Jafar & Sawlat Hilmi Zaman, 2008. "A Conceptual Review on Corporate Governance and its Effect on Firm's Performance: Bangladesh Perspective," AIUB Bus Econ Working Paper Series, American International University-Bangladesh, Office of Research and Publications (ORP) AIUB-BUS-ECON-2008-10, American International University-Bangladesh, Office of Research and Publications (ORP), revised Mar 2008.
  6. Raymond Fisman & Yongxiang Wang, 2014. "Corruption in Chinese Privatizations," NBER Working Papers 20090, National Bureau of Economic Research, Inc.


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