Title

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

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

Publisher Statement

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Full-text Version

Publisher’s Version

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