Do non‐controlling blockholders with common ownership monitor controlling shareholders effectively? Evidence from China

Kai Wang and Lihong Wang

International Review of Finance, 2025, vol. 25, issue 1

Abstract: Using a sample of Chinese listed firms during 2007–2020, we find that non‐controlling blockholders (NCBs) with common ownership can exert effective monitoring on dominant owners' self‐dealing behaviors captured by financial misconducts related to controlling shareholders. This effect is concentrated among state‐owned enterprises (SOEs), especially for the common NCBs holding only SOEs. Finally, the monitoring effect is particularly evident when firms have more peer firms, when common NCBs hold more firms within the same industry, when common NCBs exert stronger exit threats, or when common NCBs hold long investment horizons, indicating that common ownership enhances NCBs' incentives and abilities to identify and curb controlling shareholders' misbehaviors.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/irfi.12463

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:bla:irvfin:v:25:y:2025:i:1:n:e12463

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1369-412X

Access Statistics for this article

International Review of Finance is currently edited by Bruce D. Grundy, Naifu Chen, Ming Huang, Takao Kobayashi and Sheridan Titman

More articles in International Review of Finance from International Review of Finance Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().