Dynamic Panel Threshold Model-Based Analysis on Equity Restriction and Enterprise Performance in China

Bing Zhou, Meng Peng, Yingxue Tan, Sidai Guo, Shengzhong Huang and Bing Xue
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Bing Zhou: Business School, Southwest University of Political Science and Law, Chongqing 401120, China
Meng Peng: School of Economics and Statistics, Guangzhou University, Guangzhou 510006, China
Yingxue Tan: School of Accounting, Chongqing Technology and Business University, Chongqing 400067, China
Sidai Guo: Sichuan Province Cycle Economy Research Center, Southwest University of Science and Technology, Mianyang, 621010, China
Shengzhong Huang: Business School, Southwest University of Political Science and Law, Chongqing 401120, China
Bing Xue: Sichuan Province Cycle Economy Research Center, Southwest University of Science and Technology, Mianyang, 621010, China

Sustainability, 2019, vol. 11, issue 22, 1-20

Abstract: This paper takes China’s A-share listed companies of the mixed ownership of state-owned enterprises from 2007 to 2016 as a sample, and examines the impact of state-owned business mixed reform on corporate performance. Research shows that under different equity restriction ratios, there exists a difference in the connection between corporate performance and equity restriction ratio. Corporate performance reduces with the subjoin of equity restriction ratio, and they are negatively correlated when the stockholding ratio of the largest stockholder is less than 25%; on the condition that the stockholding ratio of the largest stockholder is in the range of 25 and 40% and 40 and 60%, it presents an “inverted U-shaped” connection between corporate performance and equity restriction ratio. At this time, the threshold value of the optimal equity restriction ratio is 1.1336 and 0.7297, respectively. On the condition that the stockholding ratio of the largest stockholder is equal to or more than 60%, there exists no threshold value for equity restriction ratio. However, the regression results present that corporate performance increases with the increase of equity restriction ratio, and the two are positively correlated.

Keywords: state-owned enterprise mixed reform; performance change; dynamic panel (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
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