Network-based state ownership and corporate resilience: Evidence from China

Weigang Fu, Fangrui Liu and Yan Liu

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: Better financial support from state shareholders may enhance corporate resilience when facing large negative shocks. We empirically test this hypothesis based on data of listed firms from Chinese , an institutional environment featuring wide state ownership, and exploit a negative macro shock for identification. We employ a new measure of state ownership, which is constructed for each firm by identifying its ultimate shareholders through its entire ownership network. The findings robustly support that state ownership contributes to firm resilience, and one channel is the better financial flexibility provided by higher state ownership.

Keywords: Corporate resilience; State ownership; Ownership network; Ultimate shareholder (search for similar items in EconPapers)
JEL-codes: G31 G32 G38 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012285

DOI: 10.1016/j.frl.2024.106199

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