Does Corporate Ownership matter for Firm Performance? Evidence from Chinese Stock Exchanges
<p>This paper examines the impact of corporate ownership structure and ownership concentration on the corporate performance of listed firms in China. Ordinary Least Square (OLS) and Two-Stages Least Squares (2SLS) models are used to capture the relationship between the independent variables an...
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| Format: | Article |
| Language: | English |
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EconJournals
2019-01-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://www.econjournals.com/index.php/ijefi/article/view/7336 |
| _version_ | 1828025272076599296 |
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| author | Dilesha Nawadali Rathnayake Diby Francois Kassi Pierre Axel Louembé Gang Sun Ding Ning |
| author_facet | Dilesha Nawadali Rathnayake Diby Francois Kassi Pierre Axel Louembé Gang Sun Ding Ning |
| author_sort | Dilesha Nawadali Rathnayake |
| collection | DOAJ |
| description | <p>This paper examines the impact of corporate ownership structure and ownership concentration on the corporate performance of listed firms in China. Ordinary Least Square (OLS) and Two-Stages Least Squares (2SLS) models are used to capture the relationship between the independent variables and firm performance by considering the possible endogeneity of both performance and ownership variables. The ownership structure variables (executive shares, State shares, legal shares, and Negotiable A-shares) are negatively related with firm performance measured by Tobin’s Q ratio. The proportion of state-owned shares and negotiable A-shares are significantly correlated with the firm profitability. Second, the results show that Chinese firm ownership is severely concentrated. The top ten largest shareholders accounted for 60% of the outstanding shares in 2017 and had a strong positive relationship with firm performance. In contrast, the largest shareholder’s ownership concentration ratio variable has a significant negative relationship with the firm performance.</p><p><strong>Keywords:</strong> Ownership structure, Ownership concentration, firm performance, China, Endogeneity</p><p><strong>JEL Classifications:</strong> G1, G10, G18, G32</p><p>DOI: <a href="https://doi.org/10.32479/ijefi.7336">https://doi.org/10.32479/ijefi.7336</a></p> |
| first_indexed | 2024-04-10T12:58:15Z |
| format | Article |
| id | doaj.art-885fc44fb3cd4abc84dfd5628dba64a9 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T12:58:15Z |
| publishDate | 2019-01-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-885fc44fb3cd4abc84dfd5628dba64a92023-02-15T16:13:21ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382019-01-0191961073672Does Corporate Ownership matter for Firm Performance? Evidence from Chinese Stock ExchangesDilesha Nawadali Rathnayake0Diby Francois Kassi1Pierre Axel Louembé2Gang Sun3Ding Ning4Dongbei University Finance and EconomicsDongbei University of Finance & EconomicsDongbei University of Finance & EconomicsDongbei University of Finance & EconomicsDongbei University of Finance & Economics<p>This paper examines the impact of corporate ownership structure and ownership concentration on the corporate performance of listed firms in China. Ordinary Least Square (OLS) and Two-Stages Least Squares (2SLS) models are used to capture the relationship between the independent variables and firm performance by considering the possible endogeneity of both performance and ownership variables. The ownership structure variables (executive shares, State shares, legal shares, and Negotiable A-shares) are negatively related with firm performance measured by Tobin’s Q ratio. The proportion of state-owned shares and negotiable A-shares are significantly correlated with the firm profitability. Second, the results show that Chinese firm ownership is severely concentrated. The top ten largest shareholders accounted for 60% of the outstanding shares in 2017 and had a strong positive relationship with firm performance. In contrast, the largest shareholder’s ownership concentration ratio variable has a significant negative relationship with the firm performance.</p><p><strong>Keywords:</strong> Ownership structure, Ownership concentration, firm performance, China, Endogeneity</p><p><strong>JEL Classifications:</strong> G1, G10, G18, G32</p><p>DOI: <a href="https://doi.org/10.32479/ijefi.7336">https://doi.org/10.32479/ijefi.7336</a></p>https://www.econjournals.com/index.php/ijefi/article/view/7336 |
| spellingShingle | Dilesha Nawadali Rathnayake Diby Francois Kassi Pierre Axel Louembé Gang Sun Ding Ning Does Corporate Ownership matter for Firm Performance? Evidence from Chinese Stock Exchanges International Journal of Economics and Financial Issues |
| title | Does Corporate Ownership matter for Firm Performance? Evidence from Chinese Stock Exchanges |
| title_full | Does Corporate Ownership matter for Firm Performance? Evidence from Chinese Stock Exchanges |
| title_fullStr | Does Corporate Ownership matter for Firm Performance? Evidence from Chinese Stock Exchanges |
| title_full_unstemmed | Does Corporate Ownership matter for Firm Performance? Evidence from Chinese Stock Exchanges |
| title_short | Does Corporate Ownership matter for Firm Performance? Evidence from Chinese Stock Exchanges |
| title_sort | does corporate ownership matter for firm performance evidence from chinese stock exchanges |
| url | https://www.econjournals.com/index.php/ijefi/article/view/7336 |
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