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

Tian, Lihui and Estrin, Saul (2008) Retained state shareholding in Chinese PLCs: does government ownership always reduce corporate value? Journal of Comparative Economics, 36 (1). pp. 74-89. ISSN 0147-5967

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Identification Number: 10.1016/j.jce.2007.10.003

Abstract

Government ownership of enterprises in China remains substantial. In this paper, we use a large data set of Chinese public listed companies between 1994 and 2004 to generate evidence on how government ownership influences company performance. We find the effect of government ownership on corporate value to be non-monotonic. In fact, the relationship is U-shaped; up to a certain threshold, corporate value decreases as government shareholding increases, but beyond this it increases. When its shareholding is large, the government can actually improve corporate value. We interpret this result in terms of ownership concentration and government partiality.

Item Type: Article
Official URL: http://www.sciencedirect.com/science/journal/01475...
Additional Information: © 2009 Elsevier Inc
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets
L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises; Privatization; Contracting Out
G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
Sets: Departments > Management
Collections > Economists Online
Date Deposited: 06 Feb 2009 16:06
Last Modified: 01 Nov 2011 10:07
URI: http://eprints.lse.ac.uk/id/eprint/22585

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