Shareholding structure and corporate performance of partially privatized firms: Evidence from listed Chinese companies

Qi, Daqing; Wu, Woody; Hua, Zhang

doi:10.1016/s0927-538x(00)00013-5

Cited by 313 publications

(235 citation statements)

References 13 publications

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“…The positive relationship in SOEs seems to be in contrast to previous evidence from China. This may be because we use the total equity shares held by the largest shareholders, rather than only the legal-person shares held by the largest shareholders, as in previous studies (Qi et al, 2000). In general, our results suggest that dual holding has a negative effect on firm performance in SOEs and a positive effect on firm performance in non-SOEs.…”

Section: Further Analysis: Dual Holding and Firm Performancementioning

confidence: 47%

“…Shleifer and Vishny (1986) show that some degree of ownership concentration enhances firm performance because large block shareholders, in a position to harvest a substantial portion of the gains from improvement in firm performance or a takeover, have some incentive and resources to monitor management decisions. Using the sample of China's listed firms, Qi et al (2000) find that firm performance is positively related to the proportion of legal-person shares. Therefore, we conjecture that the largest shareholders of firms with higher concentrated ownership are able to exert monitoring.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

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Does banks’ dual holding affect bank lending and firms’ investment decisions? Evidence from China

Pan

Tian

2015

Journal of Banking & Finance

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This study investigates the effect of banks' dual holding on bank lending and firms' investment decisions using a sample of listed firms in China. We find that dual holding leads to easier access to bank loans, a result that is more pronounced for non-state-owned enterprises (non-SOEs) than SOEs. We also find that dual holding distorts banks' lending decisions and harms the investment efficiency for SOEs, while resulting in optimal lending decisions and enhanced investment efficiency for non-SOEs. For non-SOEs, further analysis suggests that optimal lending decisions and efficient investment can be achieved for firms with higher ownership concentration, and firms in which the family and foreign investors are the controlling shareholders. We argue that, in emerging markets, whether a bank plays a monitoring role by directly holding the debt and equity claims of companies relies heavily on whether the potential collusion between firm executives and bank managers can be averted, which in turn is determined by the firms' governance framework and ownership structure. AbstractThis study investigates the effect of banks' dual holding on bank lending and firms' investment decisions using a sample of listed firms in China. We find that dual holding leads to easier access to bank loans, a result that is more pronounced for non-state-owned enterprises (non-SOEs) than SOEs. We also find that dual holding distorts banks' lending decisions and harms the investment efficiency for SOEs, while resulting in optimal lending decisions and enhanced investment efficiency for non-SOEs. For non-SOEs, further analysis suggests that optimal lending decisions and efficient investment can be achieved for firms with higher ownership concentration, and firms in which the family and foreign investors are the controlling shareholders. We argue that, in emerging markets, whether a bank plays a monitoring role by directly holding the debt and equity claims of companies relies heavily on whether the potential collusion between firm executives and bank managers can be averted, which in turn is determined by the firms' governance framework and ownership structure.

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Section: Further Analysis: Dual Holding and Firm Performancementioning

confidence: 47%

Section: Hypothesis Developmentmentioning

confidence: 99%

Does banks’ dual holding affect bank lending and firms’ investment decisions? Evidence from China

Pan

Tian

2015

Journal of Banking & Finance

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“…However, a negative relationship between the ratio of long-term debt to total assets and ROE was found. Qi, Wu and Zhang (2000) investigated whether and how the corporate performance of listed Chinese firms is affected by their shareholding structure. Their findings suggested that the ownership structure composition and relative dominance by various classes of shareholders can affect the performance of state-owned enterprise (SOE)-transformed and listed firms.…”

Section: Literature Reviewmentioning

confidence: 99%

Debt Policy and Corporate Performance: Empirical Evidence from Tehran Stock Exchange Companies

Sadeghian¹,

Latifi²,

Soroush³

et al. 2012

IJEF

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The ability of companies in determining suitable financial policies to make investment opportunities is one of the most principal factors for the companies' growth and progression. Adopting a debt policy or a capital structure is considered as a momentous decision that influences the companies' value. This paper is aimed to investigate the probable relationship between debt policies (including Current Debt, Non-Current Debt, and Total Debt) and performance of Tehran Stock Exchange Companies. The regression model is applied to investigate the relationship between the performance indicators and debt ratios. In this research, financial performance indicators are considered as Gross Margin Profit, Return on Assets (ROA), Tobin's Q Ratio, and Debt Ratios (Current Debt, Non-Current Debt, and Total Debt). "size" and "growth rate" are considered as control variables. Results show that an increase in current debts, non-current debts, and total debts has a negative influence on the corporate performance. It was also found that companies that merely attempt to create assets through debts, without any attention to the company size and other important factors, are not able to have an excellent performance.

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“…Furthermore, Black et al (2006) evaluate that corporate governance systems and corporate performance are interrelated with each other. In the same vein, Qi et al (2000) have also evaluated that appropriate disclosure of information to stakeholders and strong corporate governance system result in better financial position of organizations.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of corporate governance framework on the organizational performance

Changezi¹,

Saeed²

2014

IOSRJBM

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Shareholding structure and corporate performance of partially privatized firms: Evidence from listed Chinese companies

Cited by 313 publications

References 13 publications

Does banks’ dual holding affect bank lending and firms’ investment decisions? Evidence from China

Does banks’ dual holding affect bank lending and firms’ investment decisions? Evidence from China

Debt Policy and Corporate Performance: Empirical Evidence from Tehran Stock Exchange Companies

Impact of corporate governance framework on the organizational performance

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