Does the type of ownership control matter? Evidence from China's listed companies
Document Type
Journal article
Source Publication
Journal of Banking and Finance
Publication Date
1-1-2009
Volume
33
Issue
1
First Page
171
Last Page
181
Publisher
Elsevier BV
Keywords
State versus private ownership; Large shareholders; Ownership structure
Abstract
By tracing the identity of large shareholders, we group China’s listed companies into those controlled by state asset management bureaus (SAMBs), state owned enterprises (SOEs) affiliated to the central government (SOECGs), SOEs affiliated to the local government (SOELGs), and Private investors. We argue that these distinct types of owners have different objectives and motivations and this will affect how they exercise their control rights over the firms they invest in. In particular, we contend that private ownership of listed firms in China is not necessarily superior to certain types of state ownership. To test our arguments we investigate the relative efficiency of state versus private ownership of listed firms and the efficiency of various forms of state ownership. The empirical results indicate that the operating efficiency of Chinese listed companies varies across the type of controlling shareholder. SOECG controlled firms perform best and SAMB and Private controlled firms perform worst. SOELG controlled firms are in the middle. The results are consistent with our predictions.
DOI
10.1016/j.jbankfin.2007.12.023
Print ISSN
03784266
E-ISSN
18726372
Funding Information
Firth acknowledges the financial support of an earmarked grant from the Research Grants Council of the Hong Kong Special Administrative Region, China (LU340307).
Publisher Statement
Copyright © 2008 Elsevier B.V. All rights reserved.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Chen, G., Firth, M., & Xu, L. (2009). Does the type of ownership control matter? Evidence from China’s listed companies. Journal of Banking & Finance, 33(1), 171-181. doi: 10.1016/j.jbankfin.2007.12.023