Ownership structure and collateral requirements: Evidence from China's listed firms

Can An, Xiaofei Pan and Gary Gang Tian

International Review of Financial Analysis, 2014, vol. 36, issue C, 168-178

Abstract: This paper examines the effect of ownership structure on collateral requirements using a sample of China's listed firms from 2007 to 2009. We find that compared to privately controlled companies, state-controlled companies are less likely to be required to pledge collateral, and such a difference is more pronounced for firms in troubled industries. The empirical results also show that the effect of state control on collateral requirements is weaker in companies with more foreign ownership. Moreover, the effect of state control on collateral requirements is weaker in companies with more third party guarantees. Finally, we find that the effect of state control on collateral requirements is more pronounced for firms operating in regions with more government intervention.

Keywords: Ownership; Collateral requirements; Marketization (search for similar items in EconPapers)
JEL-codes: G18 G32 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:36:y:2014:i:c:p:168-178

DOI: 10.1016/j.irfa.2014.10.009

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