Does dual-class share structure increase risk-taking? Evidence from Chinese firms in the United States

Ling Ye, Jiaming Tian and Na Wang

Finance Research Letters, 2025, vol. 75, issue C

Abstract: Using Chinese Concept Stocks listed in the US from 2005 to 2020, this paper examines the impact of dual-class share structure on corporate risk-taking. We find that dual-class firms have a high level of risk-taking, which increasing research and development investment and decreasing dividend payout levels are significant mechanisms that increase risk-taking. Product market competition and corporate life-cycle have significant heterogeneous impacts. Further analysis indicates that a higher risk-taking level effectively improves dual-class firms’ value, while corporate value decreases in low-risk scenarios.

Keywords: Dual-class share structure; Risk-taking; Research and development investment (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325000704

DOI: 10.1016/j.frl.2025.106805

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