Ownership, institutions and firm value: Cross-provincial evidence from China
Research in International Business and Finance, 2018, vol. 44, issue C, 547-565
The distinctive political-economic setups of emerging economies engender special corporate governance issues that warrant added attention to the broader institutional environments. Using a unique provincial firm-level dataset, this paper investigates how corporate control natures, ownership concentration, and provincial differences in government quality and financial development jointly affect the value of Chinese listed companies. Firstly, central government control is generally associated with higher Tobin’s Q, while a negative premium is found for firms ultimately controlled by local governments. It then uses alternative concentration measures and an instrumental variable approach to confirm a nonlinear relationship between ownership concentration and Tobin’s Q, implying that firm value first decreases and then increases as blockholders own more shares. Further analysis reveals that government quality has a significant, positive moderating effect on the relationship between different corporate controllers and firm value, while the value implication of ownership concentration also depends on regional financial development.
Keywords: Corporate governance; Firm value; Government quality; Financial development; Corporate control; Ownership concentration (search for similar items in EconPapers)
JEL-codes: G31 H77 P30 P48 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:44:y:2018:i:c:p:547-565
Access Statistics for this article
Research in International Business and Finance is currently edited by T. Lagoarde Segot
More articles in Research in International Business and Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().