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Common ownership and corporate violations: Evidence from China

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  • Yao, Rongrong
  • Xiao, Min

Abstract

Using a sample of Chinese listed firms from 2007 to 2022, we provide robust evidence of a negative relationship between common ownership and corporate violations, and document that the potential mechanisms are improved corporate governance and enhanced information transparency. Our cross-sectional analyses reveal that the negative effect of common ownership on corporate violations is more pronounced among firms with a higher level of media monitoring and those with a lower proportion of state ownership. By distinguishing between different types of common ownership, we identify that common state ownership and common foreign ownership serve as key forces in reducing corporate violations. Overall, our findings are consistent with the notion that common ownership serves as an effective form of “synergistic governance” and plays a critical role in curbing corporate violations.

Suggested Citation

  • Yao, Rongrong & Xiao, Min, 2025. "Common ownership and corporate violations: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:pacfin:v:94:y:2025:i:c:s0927538x2500263x
    DOI: 10.1016/j.pacfin.2025.102926
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