Multiple large shareholders and corporate investment: Evidence from China

Jiang, Fuxiu; Cai, Wenjing; Wang, Xue; Zhu, Bing

doi:10.1016/j.jcorpfin.2018.02.001

Cited by 213 publications

(131 citation statements)

References 66 publications

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“…Second, unlike US firms whose shareholdings are always diversified, Chinese firms tend to have large controlling shareholders (Liu et al ., ). A considerable amount of literature has documented the important role played by controlling shareholders in Chinese firms (Huyghebaert and Wang, ; Jiang et al ., ; Modell and Yang, ). Controlling shareholders have a direct impact on firms’ financial decisions, performance, corporate governance and access to resources, etc.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Survival or die: a survival analysis on peer‐to‐peer lending platforms in China

Liu

Zou

Yang

et al. 2019

Accounting & Finance

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This study examines the probability of survival of online peer-to-peer (P2P) lending platforms in China. Our empirical findings show that shareholder's background, platforms' risk management and institutional environment are three major factors that influence the probability of survival of P2P platforms in China. In addition, the effects of risk control and institutional environment are less pronounced in state-owned P2P platforms. We also show that platforms that die from abscondence of owners tend to be more short-lived than others, while platforms that die from liquidity problems are usually due to lack of high-quality risk management techniques.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Survival or die: a survival analysis on peer‐to‐peer lending platforms in China

Liu

Zou

Yang

et al. 2019

Accounting & Finance

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“…Moreover, the governance role of internal control in SMEs' sustainable growth is moderated by the balance of power among multiple large shareholders. Jiang et al (2018) contend that multiple large shareholders have a governance role in corporate investment. We extend the line of the research and document that the governance role of internal control in sustainable growth is more pronounced for SMEs with multiple large shareholders, which particularly supports Hypothesis 2.…”

Section: Discussionmentioning

confidence: 99%

“…There are a number of empirical studies on the governance role of multiple large shareholders in firm value (Volpin 2002;Attig et al 2009), valuation of cash holdings (Attig et al 2013), reducing the cost of equity financing (Attig et al 2008), and increasing earnings informativeness and investment efficiency (Boubaker and Sami 2011;Jiang et al 2018). Thus, we predict that multiple large shareholders could strengthen the role of internal control in SMEs' sustainable growth.…”

Section: Internal Control Multiple Large Shareholders and Sustainabmentioning

confidence: 93%

“…Hypothesis 1 predicts that the coefficient on IC i,t in Equation (2) is positive. In Equation 3, following Attig et al (2009) and Jiang et al (2018), MLS i,t is a dummy variable that equals one if firm i has at least two large shareholders defined as one holding 10% or more of the shareholding in year t, and zero otherwise. The interaction between IC i,t and MLS i,t is used to test Hypothesis 2, predicting the coefficient of interaction is positive.…”

Section: Regression Modelmentioning

confidence: 99%

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Internal Control and SMEs’ Sustainable Growth: The Moderating Role of Multiple Large Shareholders

Wang

Dai

Ding

2019

JRFM

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Small and medium enterprises (SMEs) face more risks for sustainable growth due to a lack of resources than large firms in emerging economies. Hence, it is more likely for SMEs to look to risk management for survival in turbulent markets. As a tool of risk management, whether internal control indeed has contributions to the sustainable growth of SMEs, particularly conditional on multiple large shareholders, is empirically unexplored. Using a sample of SMEs listed in China, this study examines the relationship between internal control and sustainable growth, and assesses a moderating role of multiple large shareholders. The results show that effective internal control significantly promotes SMEs to achieve sustainable growth, and the effect is moderated by multiple large shareholders, suggesting that the role of internal control is more prominent in SMEs with multiple large shareholders. These results are robust to a battery of sensitivity tests. This study extends the literature by providing empirical evidence on the role of internal control in SMEs’ sustainable growth.

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“…The literature has discussed how to constrain the corporate overinvestment problem stemming from the abuse of rights by controlling shareholders. Such methods include increasing the cash flow rights of the controlling shareholders (La Porta et al ., ) and enhancing oversight by independent directors (Lu and Wang, ; Bird et al ., ) or by multiple large shareholders (Jiang et al ., ). However, few studies have examined the potential governance role induced by internal governance improvement aimed at controlling shareholders.…”

Section: Introductionmentioning

confidence: 97%

Ultimate parent board reform and corporate overinvestment: a quasi‐natural experiment study

Xie

Xu²,

Zeng

et al. 2019

Accounting & Finance

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Using government-led board reform as a quasi-natural experiment, we find that board reform at Chinese state controlling shareholders significantly alleviates overinvestment at their listed subsidiaries. The positive role of board reform in reducing overinvestment is stronger when state controlling shareholders have weak incentive to expropriate listed subsidiaries, or they can better monitor the listed subsidiaries through assigned top management. Furthermore, we find that board reform further reduces managerial cost at their listed subsidiaries. Overall, our findings suggest that government-led board reform enhances internal governance at state controlling shareholders and has a positive effect on investment policy at their listed subsidiaries.

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Multiple large shareholders and corporate investment: Evidence from China

Cited by 213 publications

References 66 publications

Survival or die: a survival analysis on peer‐to‐peer lending platforms in China

Survival or die: a survival analysis on peer‐to‐peer lending platforms in China

Internal Control and SMEs’ Sustainable Growth: The Moderating Role of Multiple Large Shareholders

Ultimate parent board reform and corporate overinvestment: a quasi‐natural experiment study

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