Disproportionate ownership structure and IPO long-run performance of non-SOEs in China

Xiaoming Wang, Jerry Cao, Qigui Liu, Jinghua Tang and Gary Gang Tian

China Economic Review, 2015, vol. 32, issue C, 27-42

Abstract: This paper examines the relationship between ownership structures and IPO long-run performance of non-SOEs in China. Although non-SOEs underperform the market in general after IPO but the poor performance is mainly caused by the IPOs with ownership control wedge. Non-SOEs with one share one vote structure outperform those with control-ownership wedge by 30% for three years post-IPO performance in adjusted buy-and-hold returns. Non-SOEs with control-ownership wedge have higher frequency of undertaking value-destroying related party transactions. These findings suggest that non-SOEs need to improve corporate governance such as disproportionate ownership structure to better safeguard the interest of long-run shareholders.

Keywords: IPO; Long-run performance; Disproportionate ownership; Non-SOEs firms (search for similar items in EconPapers)
JEL-codes: G30 G32 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:32:y:2015:i:c:p:27-42

DOI: 10.1016/j.chieco.2014.11.004

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