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China׳s secondary privatization: Perspectives from the Split-Share Structure Reform

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  • Liao, Li
  • Liu, Bibo
  • Wang, Hao

Abstract

The Split-Share Structure Reform granted legitimate trading rights to the state-owned shares of listed state-owned enterprises (SOEs), opening up the gate to China׳s secondary privatization. The expectation of privatization quickly boosted SOE output, profits, and employment, but did not change their operating efficiency and corporate governance. The improvements to SOE performance are positively correlated to government agents’ privatization-led incentive of increasing state-owned share value. In terms of privatization methodology, the reform adopted a market mechanism that played an effective information discovery role in aligning the interests of the government and public investors.

Suggested Citation

  • Liao, Li & Liu, Bibo & Wang, Hao, 2014. "China׳s secondary privatization: Perspectives from the Split-Share Structure Reform," Journal of Financial Economics, Elsevier, vol. 113(3), pages 500-518.
    • Handle: RePEc:eee:jfinec:v:113:y:2014:i:3:p:500-518
    DOI: 10.1016/j.jfineco.2014.05.007
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    More about this item

    Keywords

    The Split-Share Structure Reform; Privatization; State-owned enterprise; Financial reform; Market mechanism;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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