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Retained State Shareholding in Chinese PLCs: Does Government Ownership Reduce Corporate Value?

Lihui Tian () and Saul Estrin ()

No wp750, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: The role of government shareholding in corporate performance is central to an understanding of China???s newly privatized large firms. In this paper, we analyze shareholders as agents that can both harm and benefit companies. We examine the ownership structure of 826 listed corporations and find that government shareholding is surprisingly large. Its effect on corporate value is found to be negative, but non-monotonic. Up to a certain threshold, corporate value decreases as government shareholding stakes increase, but beyond this corporate value begins to increase. We interpret this in terms of ownership concentration and the advantages of government partiality.

Keywords: government shareholding; corporate governance; China. (search for similar items in EconPapers)
JEL-codes: G32 G34 G15 L33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-fin, nep-sea and nep-tra
Date: 2005-02-01
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http://deepblue.lib.umich.edu/bitstream/2027.42/40136/3/wp750.pdf

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Working Paper: Retained State Shareholding in Chinese PLCs: Does Government Ownership Reduce Corporate Value? (2005) Downloads
Working Paper: Retained State Shareholding in Chinese PLCs: Does Government Ownership Reduce Corporate Value? (2005) Downloads
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