Corruption in Chinese Privatizations

Raymond Fisman and Yongxiang Wang

No 20090, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We document evidence of corruption in Chinese state asset sales. These sales involved stakes in partially privatized firms, providing a benchmark - the price of publicly traded shares - to measure underpricing. Underpricing is correlated with deal attributes associated with misgovernance and corruption. Sales by "disguised" owners that misrepresent their state ownership to elude regulatory scrutiny are discounted 5-7 percentage points more than sales by other owners; related party transactions are similarly discounted. Analysis of subsequent operating performance provides suggestive evidence that aggregate ownership transfers improve profitability, though not in cases where the transfers themselves were corrupted.

JEL-codes: D73 G30 L33 (search for similar items in EconPapers)
Date: 2014-05
New Economics Papers: this item is included in nep-cna, nep-pol and nep-tra
Note: CF DEV POL
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Citations: View citations in EconPapers (13)

Published as R. Fisman & Y. Wang, 2015. "Corruption in Chinese Privatizations," Journal of Law, Economics, and Organization, vol 31(1), pages 1-29.

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