Corporate Ownership, Debt, and Expropriation: Evidence from China

Yunxia Bai, Bing-Xuan Lin, Yaping Wang and Liansheng Wu

China Journal of Accounting Studies, 2013, vol. 1, issue 1, 13-31

Abstract: We provide direct evidence on the dark side of leverage and offer new insights regarding the role of debt in corporate governance. Using a sample of Chinese state-owned enterprises that have experienced a transfer of controlling rights, we find a positive and significant relationship between expropriation and debt usage. Firms controlled by private block shareholders tend to have higher leverage due to excessive expropriation via debt. The evidence we document provides fresh insights into the impact of debt on the agency problem between the controlling shareholder and minority shareholders, and suggests the presence of expropriation through debt and its conditional effect on corporate ownership.

Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/21697221.2013.781771 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rcjaxx:v:1:y:2013:i:1:p:13-31

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rcja20

DOI: 10.1080/21697221.2013.781771

Access Statistics for this article

China Journal of Accounting Studies is currently edited by Xiaochen Dou

More articles in China Journal of Accounting Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().