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The IPO of Industrial and Commercial Bank of China and the 'Chinese Model' of Privatizing Large Financial Institutions

Author

Listed:
  • Allen, Franklin

    (University of PA)

  • Shan, Susan Chenyu

    (University of Hong Kong)

  • Qian, Jun

    (Boston College)

  • Zhao, Mengxin

    (University of Alberta)

Abstract

We examine the privatization process of the Industrial and Commercial Bank of China (ICBC), the largest bank in the world by market capitalization, and its dual IPOs in the Hong Kong and Shanghai Stock exchanges in 2006. The Chinese government retains majority equity ownership of ICBC while foreign institutional investors hold minority equity stakes. Other large financial institutions went through the same reform process and have similar, post-IPO ownership structures. The largest Chinese banks, as a group, outperformed their counterparts from other emerging and developed markets before and during the 2007-2009 financial crisis. We argue that the 'Chinese model' of privatizing and managing large financial institutions can be advantageously used in other countries.

Suggested Citation

  • Allen, Franklin & Shan, Susan Chenyu & Qian, Jun & Zhao, Mengxin, 2012. "The IPO of Industrial and Commercial Bank of China and the 'Chinese Model' of Privatizing Large Financial Institutions," Working Papers 12-03, University of Pennsylvania, Wharton School, Weiss Center.
    • Handle: RePEc:ecl:upafin:12-03
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    File URL: http://fic.wharton.upenn.edu/fic/papers/12/12-03.pdf
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    Cited by:

    1. Allen, Franklin & Jackowicz, Krzysztof & Kowalewski, Oskar, 2013. "The effects of foreign and government ownership on bank lending behavior during a crisis in Central and Eastern Europe," MPRA Paper 48059, University Library of Munich, Germany.
    2. Yishu Fu & Shih-Cheng Lee & Lei Xu & Ralf Zurbruegg, 2015. "The Effectiveness of Capital Regulation on Bank Behavior in China," International Review of Finance, International Review of Finance Ltd., vol. 15(3), pages 321-345, September.

    More about this item

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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