State Ownership and Firm Performance: Evidence From the Chinese Listed Firms
Based on a sample of Chinese listed firms, this paper seeks to understand the role of state ownership on firm performance (accounting-based returns) and firm value (market-based indicators). Results show that state ownership is positively associated with firm performance. In addition, state ownershi...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Vilnius University Press
2011-12-01
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| Series: | Organizations and Markets in Emerging Economies |
| Subjects: | |
| Online Access: | https://www.journals.vu.lt/omee/article/view/14282 |
| _version_ | 1811265922221998080 |
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| author | Trien Le Amon Chizema |
| author_facet | Trien Le Amon Chizema |
| author_sort | Trien Le |
| collection | DOAJ |
| description | Based on a sample of Chinese listed firms, this paper seeks to understand the role of state ownership on firm performance (accounting-based returns) and firm value (market-based indicators). Results show that state ownership is positively associated with firm performance. In addition, state ownership has a moderating effect on the association between firm performance and firm value. At low levels of state ownership, firm performance is negatively associated with firm value. However, at high levels of state ownership, the association becomes positive. Drawing on signaling theory, the study helps to understand the role of state ownership in the association between firm performance and firm value, an area that has received minimum attention in research.Specifically, state ownership may be a strategic asset for Chinese listed firms boosting accounting returns but perceived differently by the market.Given the current levels of state ownership in many transitional economies, this study sheds light for policy makers on the effects of high or low levels of state ownership on firm performance and value. Moreover, the study may assist would-be investors who may contemplate investing in privatized SOEs, in China or other countries with similar institutional arrangements. |
| first_indexed | 2024-04-12T20:32:43Z |
| format | Article |
| id | doaj.art-695f349197a648328a562c6f3f224877 |
| institution | Directory Open Access Journal |
| issn | 2029-4581 2345-0037 |
| language | English |
| last_indexed | 2024-04-12T20:32:43Z |
| publishDate | 2011-12-01 |
| publisher | Vilnius University Press |
| record_format | Article |
| series | Organizations and Markets in Emerging Economies |
| spelling | doaj.art-695f349197a648328a562c6f3f2248772022-12-22T03:17:41ZengVilnius University PressOrganizations and Markets in Emerging Economies2029-45812345-00372011-12-012210.15388/omee.2011.2.2.14282State Ownership and Firm Performance: Evidence From the Chinese Listed FirmsTrien Le0Amon Chizema1Vietnam National University HCMCLoughborough UniversityBased on a sample of Chinese listed firms, this paper seeks to understand the role of state ownership on firm performance (accounting-based returns) and firm value (market-based indicators). Results show that state ownership is positively associated with firm performance. In addition, state ownership has a moderating effect on the association between firm performance and firm value. At low levels of state ownership, firm performance is negatively associated with firm value. However, at high levels of state ownership, the association becomes positive. Drawing on signaling theory, the study helps to understand the role of state ownership in the association between firm performance and firm value, an area that has received minimum attention in research.Specifically, state ownership may be a strategic asset for Chinese listed firms boosting accounting returns but perceived differently by the market.Given the current levels of state ownership in many transitional economies, this study sheds light for policy makers on the effects of high or low levels of state ownership on firm performance and value. Moreover, the study may assist would-be investors who may contemplate investing in privatized SOEs, in China or other countries with similar institutional arrangements.https://www.journals.vu.lt/omee/article/view/14282State ownershipFirm valueFirm performanceSignalingChina |
| spellingShingle | Trien Le Amon Chizema State Ownership and Firm Performance: Evidence From the Chinese Listed Firms Organizations and Markets in Emerging Economies State ownership Firm value Firm performance Signaling China |
| title | State Ownership and Firm Performance: Evidence From the Chinese Listed Firms |
| title_full | State Ownership and Firm Performance: Evidence From the Chinese Listed Firms |
| title_fullStr | State Ownership and Firm Performance: Evidence From the Chinese Listed Firms |
| title_full_unstemmed | State Ownership and Firm Performance: Evidence From the Chinese Listed Firms |
| title_short | State Ownership and Firm Performance: Evidence From the Chinese Listed Firms |
| title_sort | state ownership and firm performance evidence from the chinese listed firms |
| topic | State ownership Firm value Firm performance Signaling China |
| url | https://www.journals.vu.lt/omee/article/view/14282 |
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