IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v53y2017i6p1405-1424.html
   My bibliography  Save this article

Decisions Made by the Controlling Shareholder Under Financial Crisis

Author

Listed:
  • Huajie Liang
  • Renzeng Wang

Abstract

We employ a sample of 12,200 observations from 2,321 companies listed on the Shanghai and Shenzhen Stock Exchanges in China between 2005 and 2013 to test five hypotheses. The empirical results show that the cost of tunneling and ownership structure play important roles in restraining incentives to expropriate firms. Financial crisis will reinforce the incentive to propping rather than tunneling with higher ownership concentration. Moreover, controlling shareholders of state-owned enterprises show a stronger motivation to prop up during crisis periods than do those of non-state-owned enterprises. The results indicate that both an entrenchment effect and a convergence-of-interest effect actually exist and vary according to ownership structure and macroeconomic circumstances.

Suggested Citation

  • Huajie Liang & Renzeng Wang, 2017. "Decisions Made by the Controlling Shareholder Under Financial Crisis," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 53(6), pages 1405-1424, June.
    • Handle: RePEc:mes:emfitr:v:53:y:2017:i:6:p:1405-1424
    DOI: 10.1080/1540496X.2017.1321538
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1540496X.2017.1321538
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1540496X.2017.1321538?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:53:y:2017:i:6:p:1405-1424. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.