Foreign shareholding, corporate governance and firm performance: Evidence from Chinese companies

Georges Tsafack and Lin Guo

Journal of Behavioral and Experimental Finance, 2021, vol. 31, issue C

Abstract: This paper examines how a firm’s corporate governance characteristics and institutional environment affect the presence of large foreign shareholding, and how a firm’s foreign ownership influences its performance. For a sample of listed Chinese companies, we find that both firm-level governance characteristics and country-level institutional environment affect the presence and the extent of large foreign shareholding. We also find an inverted U-shaped relation between a firm’s foreign ownership and its return on assets, return on equity and Tobin’s q. The implied optimal foreign ownership increases when changes in institutional environment reduce the opportunity for controlling shareholders to extract private benefits.

Keywords: Chinese market; Foreign investor; Firm performance; Corporate governance (search for similar items in EconPapers)
JEL-codes: F39 G30 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2214635021000605

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:eee:beexfi:v:31:y:2021:i:c:s2214635021000605

DOI: 10.1016/j.jbef.2021.100516

Access Statistics for this article

Journal of Behavioral and Experimental Finance is currently edited by Michael Dowling and Jürgen Huber

More articles in Journal of Behavioral and Experimental Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().