IDEAS home Printed from https://ideas.repec.org/a/rfa/aefjnl/v4y2017i2p57-64.html
   My bibliography  Save this article

Ownership Structure and Firm Performance: An Empirical Analysis of Chinese Companies

Author

Listed:
  • Hui Zhang
  • Khine Kyaw

Abstract

This study examines the relationship between ownership structure and firm performance in Chinese companies. We hand collected ownership data on 1178 non-financial companies with a total of 5815 firm-years from annual reports. Through fixed-effect panel model, this study has the following findings. First, there is a positive relationship between firm performance and institutional ownership in Chinese companies. Second, the proportion of tradable shares negatively affects firm performance. Third, ownership concentration and state ownership appear to not affect firm performance.

Suggested Citation

  • Hui Zhang & Khine Kyaw, 2017. "Ownership Structure and Firm Performance: An Empirical Analysis of Chinese Companies," Applied Economics and Finance, Redfame publishing, vol. 4(2), pages 57-64, March.
    • Handle: RePEc:rfa:aefjnl:v:4:y:2017:i:2:p:57-64
    as

    Download full text from publisher

    File URL: http://redfame.com/journal/index.php/aef/article/view/2109/2204
    Download Restriction: no
    File URL: http://redfame.com/journal/index.php/aef/article/view/2109
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Admati, Anat R & Pfleiderer, Paul & Zechner, Josef, 1994. "Large Shareholder Activism, Risk Sharing, and Financial Market Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1097-1130, December.
    2. Hart, Oliver, 1995. "Corporate Governance: Some Theory and Implications," Economic Journal, Royal Economic Society, vol. 105(430), pages 678-689, May.
    3. Li, Hongbin & Meng, Lingsheng & Wang, Qian & Zhou, Li-An, 2008. "Political connections, financing and firm performance: Evidence from Chinese private firms," Journal of Development Economics, Elsevier, vol. 87(2), pages 283-299, October.
    4. Elyasiani, Elyas & Jia, Jingyi, 2010. "Distribution of institutional ownership and corporate firm performance," Journal of Banking & Finance, Elsevier, vol. 34(3), pages 606-620, March.
    5. Martin Hovey & Larry Li & Tony Naughton, 2003. "The Relationship Between Valuation and Ownership of Listed Firms in China," Corporate Governance: An International Review, Wiley Blackwell, vol. 11(2), pages 112-122, April.
    6. Jiang, Guohua & Lee, Charles M.C. & Yue, Heng, 2010. "Tunneling through intercorporate loans: The China experience," Journal of Financial Economics, Elsevier, vol. 98(1), pages 1-20, October.
    7. Gorton, Gary & Kahl, Matthias, 2008. "Blockholder Scarcity, Takeovers, and Ownership Structures," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 43(4), pages 937-974, December.
    8. Dahya, Jay & Dimitrov, Orlin & McConnell, John J., 2008. "Dominant shareholders, corporate boards, and corporate value: A cross-country analysis," Journal of Financial Economics, Elsevier, vol. 87(1), pages 73-100, January.
    9. Clarke, Donald C., 2003. "Corporate governance in China: An overview," China Economic Review, Elsevier, vol. 14(4), pages 494-507.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yonggen Luo & Miaomiao Fang & Antai Li & Shiqiang Chen, 2024. "Opportunity or opportunism? Blockchain technology adoption and corporate default risk," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Yu, 2020. "The comparative and interactive effects of political, academic and financial directors," International Review of Economics & Finance, Elsevier, vol. 70(C), pages 546-565.
    2. Gao, Yang & Ling, Yun & Peng, Hui, 2024. "Before thrive, first survive: The impact of controlling shareholder pledging on corporate ESG performance," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    3. Borisova, Ginka & Brockman, Paul & Salas, Jesus M. & Zagorchev, Andrey, 2012. "Government ownership and corporate governance: Evidence from the EU," Journal of Banking & Finance, Elsevier, vol. 36(11), pages 2917-2934.
    4. Ding, Mingfa, 2014. "Political Connections and Stock Liquidity: Political Network, Hierarchy and Intervention," Knut Wicksell Working Paper Series 2014/7, Lund University, Knut Wicksell Centre for Financial Studies.
    5. Anderson, Hamish & Chi, Jing & Liao, Jing, 2019. "Foreign strategic ownership and minority shareholder protection," Emerging Markets Review, Elsevier, vol. 39(C), pages 34-49.
    6. Li, Larry & McMurray, Adela & Sy, Malick & Xue, Jinjun, 2018. "Corporate ownership, efficiency and performance under state capitalism: Evidence from China," Journal of Policy Modeling, Elsevier, vol. 40(4), pages 747-766.
    7. Abdul Waheed & Qaisar Ali Malik, 2021. "Institutional Ownership Board Characteristics and Firm Performance: A Contingent Theoretical Approach," International Journal of Asian Business and Information Management (IJABIM), IGI Global, vol. 12(2), pages 1-15, April.
    8. Aggarwal, Raj & Jindal, Varun & Seth, Rama, 2019. "Board diversity and firm performance: The role of business group affiliation," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    9. Richard W. Carney & Travers Barclay Child, 2015. "Business Networks and Crisis Performance: Professional, Political, and Family Ties," Tinbergen Institute Discussion Papers 15-135/V, Tinbergen Institute, revised 20 Feb 2015.
    10. Sokolov, Vladimir & Solanko, Laura, 2016. "Political influence, firm performance and survival," BOFIT Discussion Papers 20/2016, Bank of Finland Institute for Emerging Economies (BOFIT).
    11. He, Lerong & Wan, Hong & Zhou, Xin, 2014. "How are political connections valued in China? Evidence from market reaction to CEO succession," International Review of Financial Analysis, Elsevier, vol. 36(C), pages 141-152.
    12. Ding, Xiaoya & Guedhami, Omrane & Ni, Yang & Pittman, Jeffrey A., 2020. "Local and foreign institutional investors, information asymmetries, and state ownership," Pacific-Basin Finance Journal, Elsevier, vol. 63(C).
    13. Ali, Muhammad Jahangir & Biswas, Pallab Kumar & Chapple, Larelle & Kumarasinghe, Sriyalatha, 2024. "Institutional ownership and earnings quality: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 84(C).
    14. Michael Ryngaert & Shawn Thomas, 2012. "Not All Related Party Transactions (RPTs) Are the Same: Ex Ante Versus Ex Post RPTs," Journal of Accounting Research, Wiley Blackwell, vol. 50(3), pages 845-882, June.
    15. Pessarossi, Pierre & Weill, Laurent, 2013. "Does CEO turnover matter in China? Evidence from the stock market," Journal of Economics and Business, Elsevier, vol. 70(C), pages 27-42.
    16. Réal Labelle & Claude Francoeur & Faten Lakhal, 2015. "To Regulate Or Not To Regulate? Early Evidence on the Means Used Around the World to Promote Gender Diversity in the Boardroom," Gender, Work and Organization, Wiley Blackwell, vol. 22(4), pages 339-363, July.
    17. Chen, Yunsen & Huang, Jianqiao & Xiao, Sheng & Zhao, Ziye, 2020. "The “home bias” of corporate subsidiary locations," Journal of Corporate Finance, Elsevier, vol. 62(C).
    18. Chenhao Hu, 2023. "The dual role of state shareholders in disclosed corporate misconduct: Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1732-1748, April.
    19. Allen, Franklin & Qian, Jun & Qian, Meijun, 2018. "A Review of China’s Institutions," CEPR Discussion Papers 13269, C.E.P.R. Discussion Papers.
    20. Guo, Kai & Ke, Bin & Tang, Song, 2023. "Private firms' financial constraints and share pledging by controlling shareholders of publicly listed firms: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 80(C).

    More about this item

    Keywords

    state ownership; institutional ownership; tradable shares; firm performance; China;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    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:rfa:aefjnl:v:4:y:2017:i:2:p:57-64. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Redfame publishing (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    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.