Value creation in Chinese equity transfers

Equity transfers in China represent a strategic mechanism for corporate restructuring that can promote sustainable financial development and foster inclusive economic growth. We find that such transfers generate significant positive abnormal returns in the short-term and robust buy-and-hold returns over one- and two-year periods. The long-term value creation is particularly pronounced when there is an increase in the proportion of tradable shares and a broadening of the controlling shareholder base, indicating stronger corporate governance and enhanced transparency. These outcomes are especially notable in firms operating within pillar industries, those engaged in multiple equity transfer transactions, and those that demonstrate rising ownership concentration, signaling a shift toward more responsible and accountable corporate stewardship. Post-policy shifts such as the Split Share Structure Reform, the global financial crisis, and national deleveraging campaigns further emphasize the role of equity transfers in strengthening financial resilience.