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Ownership Structure as Corporate Governance Mechanism: Evidence from Chinese Listed Companies

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  • Chen, Jian

Abstract

This paper examines the cross-sectional relation between ownership structure and corporate performance of a sample of 434 manufacturing firms listed on the Chinese stock exchange. Following the agency theory and taking other influential factors into account, such as firm size, leverage ratio, variance of sales, growth of sale and firm age, the results suggest that there is a strong relation between ownership concentration and corporate performance, measured by Tobin's Q. A further classification of owners reveals that while shares held by state play a negative role in corporate governance, domestic institutional and managerial shareholdings improve the firms' performance. Copyright 2001 by Kluwer Academic Publishers

Suggested Citation

  • Chen, Jian, 2001. "Ownership Structure as Corporate Governance Mechanism: Evidence from Chinese Listed Companies," Economic Change and Restructuring, Springer, vol. 34(1-2), pages 53-72.
  • Handle: RePEc:kap:ecopln:v:34:y:2001:i:1-2:p:53-72
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    Citations

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    Cited by:

    1. Gutierrez, Luis H. & Pombo, Carlos & Taborda, Rodrigo, 2008. "Ownership and control in Colombian corporations," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(1), pages 22-47, February.
    2. Zhong Qin & Xin Deng, 2016. "Government and family Guanxi in Chinese private firms: perceptions and preference," Review of Managerial Science, Springer, vol. 10(1), pages 35-60, January.
    3. Hovey, Martin & Naughton, Tony, 2007. "A survey of enterprise reforms in China: The way forward," Economic Systems, Elsevier, vol. 31(2), pages 138-156, June.
    4. repec:eee:reveco:v:51:y:2017:i:c:p:82-98 is not listed on IDEAS
    5. Chen, Alex A. & Cao, Hong & Zhang, Dayong & Dickinson, David G., 2013. "The impact of shareholding structure on firm investment: Evidence from Chinese listed companies," Pacific-Basin Finance Journal, Elsevier, vol. 25(C), pages 85-100.
    6. Chan, Kam C. & Fung, Hung-Gay & Thapa, Samanta, 2007. "China financial research: A review and synthesis," International Review of Economics & Finance, Elsevier, vol. 16(3), pages 416-428.
    7. Chen Chien-Hsun & Shih Hui-Tzu, 2004. "Initial Public Offering and Corporate Governance in China's Transitional Economy," NBER Chapters,in: Governance, Regulation, and Privatization in the Asia-Pacific Region, NBER East Asia Seminar on Economics, Volume 12, pages 185-210 National Bureau of Economic Research, Inc.
    8. Saam, Nicole J., 2007. "Asymmetry in information versus asymmetry in power: Implicit assumptions of agency theory?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(6), pages 825-840, December.
    9. Langnan Chen & Steven Li & Yijia Chen, 2005. "Corporate Governance and Corporate Performance: Some Evidence from Newly Listed Firms on Chinese Stock Markets," School of Economics and Finance Discussion Papers and Working Papers Series 204, School of Economics and Finance, Queensland University of Technology.
    10. Helen Hu & On Tam & Monica Tan, 2010. "Internal governance mechanisms and firm performance in China," Asia Pacific Journal of Management, Springer, vol. 27(4), pages 727-749, December.
    11. Tariq, Yasir Bin & Abbas, Zaheer, 2013. "Compliance and multidimensional firm performance: Evaluating the efficacy of rule-based code of corporate governance," Economic Modelling, Elsevier, vol. 35(C), pages 565-575.
    12. Clarke, Donald C., 2003. "Corporate governance in China: An overview," China Economic Review, Elsevier, vol. 14(4), pages 494-507.
    13. He, Yan & Chiu, Yung-ho & Zhang, Bin, 2015. "The impact of corporate governance on state-owned and non-state-owned firms efficiency in China," The North American Journal of Economics and Finance, Elsevier, vol. 33(C), pages 252-277.
    14. Liu, Jianlei & Uchida, Konari & Gao, Ruidong, 2012. "Political connections and the long-term stock performance of Chinese IPOs," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 22(4), pages 814-833.
    15. Zhong Qin & Xin Deng, 2016. "Government and family Guanxi in Chinese private firms: perceptions and preference," Review of Managerial Science, Springer, vol. 10(1), pages 35-60, January.

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