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Heterogeneous capital of founding shareholders, dual-class share structure choice motivation, and firm value: Evidence from China's sci-tech innovation companies listed in the U.S

Author

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  • Wang, Liang
  • Liu, Shuang
  • Wang, Yuanfei

Abstract

This paper selects China's Sci-Tech innovation companies listed in the U.S. from 2013 to 2022 as the initial sample. It constructs a multivariate panel regression model to empirically examine the relationship between the heterogeneous capital of founding shareholders, the dual-class share structure choice motivation, and firm value. The findings reveal that the heterogeneous capital of founding shareholders within a dual-class share structure significantly contributes to firm value. However, the motivation to acquire private benefits of control within the dual-class share structure does not significantly impact firm value. Meanwhile, the motivation to prevent the transfer of control rights negatively correlates with firm value. Furthermore, financing constraints partially mitigate the motivation for acquiring private benefits of control within the dual-class share structure but do not significantly affect the motivation to prevent the transfer of control rights. External monitoring reinforces the motivation to prevent the transfer of control rights in a dual-class share structure but does not moderate the motivation to acquire private control of benefits. The relationship between the separation of control and cash flow rights and firm value follows a U-shaped pattern.

Suggested Citation

  • Wang, Liang & Liu, Shuang & Wang, Yuanfei, 2026. "Heterogeneous capital of founding shareholders, dual-class share structure choice motivation, and firm value: Evidence from China's sci-tech innovation companies listed in the U.S," Economic Analysis and Policy, Elsevier, vol. 89(C), pages 107-133.
    • Handle: RePEc:eee:ecanpo:v:89:y:2026:i:c:p:107-133
    DOI: 10.1016/j.eap.2025.11.026
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    References listed on IDEAS

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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