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Political Pressure or Rent Seeking? The Role of Mutual Funds in China's Split Share Structure Reform

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  • Ping Jiang
  • Xinjian Shao
  • Yi Xue

Abstract

In this paper, we provide further evidence on the role of mutual funds in China using the split share structure reform as an experiment. We find no supportive evidence for the political pressure hypothesis of Firth et al. (2010), but provide a set of unique results that are consistent with rent‐seeking behaviour by mutual funds. In addition, fund‐level governance can weaken the negative relationship between compensation ratio and fund ownership. Finally, we document a specific form of private benefits that can contribute to rent‐seeking behaviour by mutual funds.

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  • Ping Jiang & Xinjian Shao & Yi Xue, 2018. "Political Pressure or Rent Seeking? The Role of Mutual Funds in China's Split Share Structure Reform," Australian Economic Papers, Wiley Blackwell, vol. 57(3), pages 284-308, September.
    • Handle: RePEc:bla:ausecp:v:57:y:2018:i:3:p:284-308
    DOI: 10.1111/1467-8454.12125
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    References listed on IDEAS

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