 Ultimate privatization and change in firm performance: Evidence from ChinaZhangkai Huang and Kun Wang China Economic Review, 2011, vol. 22, issue 1, 121-132 Abstract: We extend the current empirical literature on privatization by exploring the effect of ultimate privatization on the performance of Chinese listed companies. Ultimate privatization is defined as the incidence of transferring the ultimate control of a state-owned company from the government to private owners. Using a sample of 127 Chinese listed companies that have had controlling blocks transferred from the government to private owners, we show that firm performance improved significantly following this transfer. In addition, gains in profitability and efficiency are more prominent when the new controlling shareholder is an "outsider", one who does not own shares in the company prior to the transfer of control. Our results suggest that the Chinese government should continue to reduce its controlling ownership in listed companies, as the transfer of control to private owners enhances operating efficiency and profitability. Keywords: Ultimate; privatization; Control; transfer; State-owned; enterprises; Insider; Outsider (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:22:y:2011:i:1:p:121-132 Access Statistics for this article China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu More articles in China Economic Review from Elsevier |
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