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Disproportionate ownership structure and IPO long-run performance of non-SOEs in China

Listed author(s):
  • Wang, Xiaoming
  • Cao, Jerry
  • Liu, Qigui
  • Tang, Jinghua
  • Tian, Gary Gang
Registered author(s):

    This paper examines the relationship between ownership structures and IPO long-run performance of non-SOEs in China. Although non-SOEs underperform the market in general after IPO but the poor performance is mainly caused by the IPOs with ownership control wedge. Non-SOEs with one share one vote structure outperform those with control-ownership wedge by 30% for three years post-IPO performance in adjusted buy-and-hold returns. Non-SOEs with control-ownership wedge have higher frequency of undertaking value-destroying related party transactions. These findings suggest that non-SOEs need to improve corporate governance such as disproportionate ownership structure to better safeguard the interest of long-run shareholders.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X14001436
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    Article provided by Elsevier in its journal China Economic Review.

    Volume (Year): 32 (2015)
    Issue (Month): C ()
    Pages: 27-42

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    Handle: RePEc:eee:chieco:v:32:y:2015:i:c:p:27-42
    DOI: 10.1016/j.chieco.2014.11.004
    Contact details of provider: Web page: http://www.elsevier.com/locate/chieco

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