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Only the connected survive: Common ownership and corporate resilience

Author

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  • Yao, Rongrong
  • Xiao, Min
  • Lin, Ling
  • Zhang, Xiaoying

Abstract

We find that common ownership (investors holding stocks in competing firms) enhances corporate resilience to COVID-19, using a sample of Chinese listed firms over the period surrounding the COVID-19 outbreak. The positive impact of common ownership on resilience is stronger for firms facing severer agency problems, greater financing difficulties, and weaker stakeholder coordination. Common owners improve corporate governance and better align stakeholder interests in the firms they own. Consequently, these firms exhibit higher managerial risk-taking, greater employee efficiency, and more trade credit financing from suppliers compared to firms without common ownership. Additionally, we find that common ownership is linked to a lower likelihood of financial distress and bankruptcy. Collectively, we provide novel evidence of how common owners influence corporate resilience in the aftermath of crises and benefit the companies they own.

Suggested Citation

  • Yao, Rongrong & Xiao, Min & Lin, Ling & Zhang, Xiaoying, 2026. "Only the connected survive: Common ownership and corporate resilience," Pacific-Basin Finance Journal, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:pacfin:v:95:y:2026:i:c:s0927538x25003348
    DOI: 10.1016/j.pacfin.2025.102997
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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