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Title: Leverage, Profitability and the Ownership Structures of Listed Firms in China
Contributor(s): Hovey, Martin  (author)
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Abstract: The relationship between leverage, profitability and a firm's ownership structure in China is investigated in this paper. It is an exploratory study based on all firms listed on the Shanghai and Shenzhen stock exchanges from 1999 to 2005. The results of the empirical analysis are reported in this paper. The most significant result is that foreign holdings are found to have a significant relationship with the leverage of listed firms in China. Whereas, somewhat unexpectedly, institutional ownership, through legal person holding companies, state ownership and private holdings are not found to have a significant relationship with the capital structure choices of firms in China. The results also suggest that some firm-specific factors that are relevant for explaining firm leverage generally referred to in studies in developed economies, such as profitability, growth opportunities, size and tax shields, are also relevant in China. The age of the firms and the industry to which they principally belong also has significant bearing. Yet direct government grants and the use of an internationally renowned auditing firm do not show a significant relationship.
Publication Type: Working Paper
Field of Research (FOR): 150201 Finance
150303 Corporate Governance and Stakeholder Engagement
150203 Financial Institutions (incl Banking)
HERDC Category Description: W Working Paper
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Series Name: Working Paper Series
Series Number : 1009432
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Appears in Collections:UNE Business School
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