Share reform and the performance of Chinaï¿½s listed companies
The latest round of share reform in China, which began in 2005, sets two related processes in motion: it increases the tradable share proportion and signals the start of a decline in the government-owned share proportion. This paper considers the effect these processes might have on firm performance in the future by analysing the impact the above share proportions had on firm performance immediately prior to reform commencing. The government-owned share proportion is found to exert a linear and positive impact on firm performance. Further, it is revealed that this impact is best explained by the high ownership concentration of government shareholdings. The policy implication is that simply making all shares tradable need not lead to better firm performance. Rather, a more pertinent consideration is whether shareholdings become more or less diffuse, and this highlights the importance of non-government institutional investors playing a more prominent role than they currently do.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: St. Lucia, Qld. 4072|
Phone: +61 7 3365 6570
Fax: +61 7 3365 7299
Web page: http://www.uq.edu.au/economics/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sun, Qian & Tong, Wilson H. S., 2003. "China share issue privatization: the extent of its success," Journal of Financial Economics, Elsevier, vol. 70(2), pages 183-222, November.
- Wang, Changyun, 2005. "Ownership and operating performance of Chinese IPOs," Journal of Banking & Finance, Elsevier, vol. 29(7), pages 1835-1856, July.
- Xiaozu Wang & Lixin Colin Xu & Tian Zhu, 2004. "State-owned enterprises going public "The case of China"," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(3), pages 467-487, 09.
- Bai, Chong-En & Liu, Qiao & Lu, Joe & Song, Frank M. & Zhang, Junxi, 2004. "Corporate governance and market valuation in China," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 599-616, December.
- Demurger, Sylvie, 2001. "Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 95-117, March.
- Qian Sun & Wilson H. S. Tong & Jing Tong, 2002. "How Does Government Ownership Affect Firm Performance? Evidence from China's Privatization Experience," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 29(1&2), pages 1-27.
- Wei, Zuobao & Varela, Oscar, 2003. "State equity ownership and firm market performance: evidence from China's newly privatized firms," Global Finance Journal, Elsevier, vol. 14(1), pages 65-82, May.
- Paul McGuinness & Michael Ferguson, 2005. "The ownership structure of listed Chinese State-owned enterprises and its relation to corporate performance," Applied Financial Economics, Taylor & Francis Journals, vol. 15(4), pages 231-246.
When requesting a correction, please mention this item's handle: RePEc:qld:uqeaer:10. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SOE IT)
If references are entirely missing, you can add them using this form.