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Counterbalance effect of multiple major shareholders in Chinese listed companies: A strategic decision-making perspective

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  • Kong, Xiaoxu
  • Ning, Peipei
  • Tang, Xiaomeng

Abstract

The ownership structure of multiple major shareholders is very prevalent among China’s listed companies and has a vital impact on corporate strategy. This study examines the influence of multiple major shareholders on corporate differentiation strategy in Chinese listed companies. The results show that multiple major shareholders promote the decision and implementation of enterprise differentiation strategy. Board capital width and depth play a mediating role. Financial redundancy and corporate competitive culture positively moderate the relationship between multiple major shareholders and differentiation strategy, while human resource redundancy has a negative effect. Further research shows that in enterprises with multiple major shareholders, differentiation strategy can improve performance. From the perspective of equity balance, this study examines the role of multiple major shareholders in emerging markets to provide insights for improving the modern corporate governance system and guidance for enterprises to implement competitive strategies.

Suggested Citation

  • Kong, Xiaoxu & Ning, Peipei & Tang, Xiaomeng, 2023. "Counterbalance effect of multiple major shareholders in Chinese listed companies: A strategic decision-making perspective," Research in International Business and Finance, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:riibaf:v:66:y:2023:i:c:s0275531923001307
    DOI: 10.1016/j.ribaf.2023.102004
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    References listed on IDEAS

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    1. Mara Faccio & Maria-Teresa Marchica & Roberto Mura, 2011. "Large Shareholder Diversification and Corporate Risk-Taking," The Review of Financial Studies, Society for Financial Studies, vol. 24(11), pages 3601-3641.
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    4. Zhong, Ruohan & Li, Yanxi & Wang, Yun, 2021. "Multiple large shareholders, control contests, and forced CEO turnover," Emerging Markets Review, Elsevier, vol. 48(C).
    5. Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
    6. Luc Laeven & Ross Levine, 2008. "Complex Ownership Structures and Corporate Valuations," The Review of Financial Studies, Society for Financial Studies, vol. 21(2), pages 579-604, April.
    7. Päivi Karhunen & Svetlana Ledyaeva, 2021. "Is Chain Affiliation a Strategic Asset or Constraint in Emerging Economies? Competitive Strategies and Performance in the Russian Hotel Industry," Management International Review, Springer, vol. 61(3), pages 403-427, June.
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    Cited by:

    1. Li, WeiWei & Huang, Chia-Hsing, 2024. "Multiple large shareholders and asset-liability maturity mismatches," Finance Research Letters, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Multiple major shareholders; Differentiation strategy; Board capital; Corporate culture; Redundant resources; Enterprise performance;
    All these keywords.

    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
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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