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Retained state shareholding in Chinese PLCs: Does government ownership reduce corporate value?

Estrin, Saul and Tian, Lihui (2005) Retained state shareholding in Chinese PLCs: Does government ownership reduce corporate value? IZA Discussion Paper No. 1493. London School of Economics and Political Science, London, UK.

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Abstract

The role of government shareholding in corporate performance is central to an understanding of China's newly privatized large firms. In this paper, we analyze shareholders as agents that can both harm and benefit companies. We examine the ownership structure of 826 listed corporations and find that government shareholding is surprisingly large. Its effect on corporate value is found to be negative, but non-monotonic. Up to a certain threshold, corporate value decreases as government shareholding stakes increase, but beyond this corporate value begins to increase. We interpret this in terms of ownership concentration and the advantages of government partiality.

Item Type: Monograph (Working Paper)
Additional Information: © 2005 London School of Economics and Political Science
Library of Congress subject classification: H Social Sciences > H Social Sciences (General)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: IZA Discussion Paper No. 1493
Date Deposited: 18 Aug 2008 15:50
URL: http://eprints.lse.ac.uk/20790/

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