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Ownership structure and firm performance: Evidence from the Chinese corporate reform

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  • Kang, Young-Sam
  • Kim, Byung-Yeon

Abstract

We employ a new classification of ownership identity to analyze the impact of ownership structure on enterprise performance in China. Using both fixed effects model and Generalized Methods of Moments (GMM), this study finds that marketized state-owned enterprises outperform firms controlled by the government, indicating that partial privatization of state-owned Chinese firms improves corporate governance. Non-controlling large shareholders of marketized state-owned enterprises and private enterprises are found to play active roles in corporate governance. Lastly, there is evidence that ownership concentration of a controlling shareholder decreases the incentives to expropriate minority shareholders.

Suggested Citation

  • Kang, Young-Sam & Kim, Byung-Yeon, 2012. "Ownership structure and firm performance: Evidence from the Chinese corporate reform," China Economic Review, Elsevier, vol. 23(2), pages 471-481.
  • Handle: RePEc:eee:chieco:v:23:y:2012:i:2:p:471-481
    DOI: 10.1016/j.chieco.2012.03.006
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    References listed on IDEAS

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    Cited by:

    1. Nicholas Lee & Fu-Min Chang & Yale Wang & Duong Thu La & Hsiang-Jane Su, 2017. "Impacts of Macroeconomic News on Vietnamese SOEs' Performance," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 7(1), pages 1-5.
    2. Shao, Yingying & Hernández, Rodrigo & Liu, Pu, 2015. "Government intervention and corporate policies: Evidence from China," Journal of Business Research, Elsevier, vol. 68(6), pages 1205-1215.
    3. World Bank, 2015. "Governance Reforms of State-Owned Enterprises," World Bank Other Operational Studies 22749, The World Bank.
    4. repec:bpj:rmeecf:v:13:y:2017:i:3:p:25:n:1 is not listed on IDEAS
    5. Kandil Magda Elsayed & Markovski Minko, 2017. "The Impact of Ownership on Corporate Performance: The Case of the UAE," Review of Middle East Economics and Finance, De Gruyter, vol. 13(3), pages 1-25, December.

    More about this item

    Keywords

    Privatization; Gradual approach; Ownership structure; Marketized state-owned enterprises; China;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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