State-dominant and non-state-dominant ownership concentration and firm performance: Evidence from China

Hess, Kurt; Gunasekarage, Abeyratna; Hovey, Martin

doi:10.1108/17439131011074440

Author(s)

Hess, Kurt

Gunasekarage, Abeyratna

Hovey, Martin

Publication Date

2010

Abstract

Purpose – This paper aims to investigate the relationship between ownership structure and performance for a comprehensive sample of Chinese listed firms for the years 2000-2004. In particular, the paper seeks to explore the effect of the dominance of state and private blockholders and control on firm performance. It aims to use a more differentiated approach than previous research on the subject, which has mainly focused on the effects of the pervasive state ownership on firm values. Accordingly, the main theme of the paper intends to relate to the analysis of the effects of private blockholders on firm value. Design/methodology/approach – The paper tests the ownership-performance relationship for the state and for sub-samples with predominantly private shareholders. The paper uses both an ordinary least squares and a two-stage least squares analysis, which treats ownership concentration as endogenous. Findings – The paper finds evidence that large private blockholdings are to the benefit of firm value for the full sample. Conversely, for smaller samples of companies without or with very low shareholdings by the various state players, there is some evidence that large private block shareholdings might be to the detriment of firm value. Originality/value – The study contributes to the literature by presenting a more comprehensive treatment of the ownership-performance relationship of listed firms in China. The main theme of the paper relates to ownership concentration and the effects of private blockholders on the performance of firms, in addition to the endogeneity of ownership. It also contributes by utilising the alternative ownership classification system developed by the National University of Singapore.

Citation

International Journal of Managerial Finance, 6(4), p. 264-289

ISSN

1758-6569

1743-9132

Link

https://hdl.handle.net/1959.11/7021

Language

en

Publisher

Emerald Publishing Limited

Title

State-dominant and non-state-dominant ownership concentration and firm performance: Evidence from China

Type of document

Journal Article

Entity Type

Publication

Author(s)	Hess, Kurt Gunasekarage, Abeyratna Hovey, Martin
Publication Date	2010
Abstract	Purpose – This paper aims to investigate the relationship between ownership structure and performance for a comprehensive sample of Chinese listed firms for the years 2000-2004. In particular, the paper seeks to explore the effect of the dominance of state and private blockholders and control on firm performance. It aims to use a more differentiated approach than previous research on the subject, which has mainly focused on the effects of the pervasive state ownership on firm values. Accordingly, the main theme of the paper intends to relate to the analysis of the effects of private blockholders on firm value. Design/methodology/approach – The paper tests the ownership-performance relationship for the state and for sub-samples with predominantly private shareholders. The paper uses both an ordinary least squares and a two-stage least squares analysis, which treats ownership concentration as endogenous. Findings – The paper finds evidence that large private blockholdings are to the benefit of firm value for the full sample. Conversely, for smaller samples of companies without or with very low shareholdings by the various state players, there is some evidence that large private block shareholdings might be to the detriment of firm value. Originality/value – The study contributes to the literature by presenting a more comprehensive treatment of the ownership-performance relationship of listed firms in China. The main theme of the paper relates to ownership concentration and the effects of private blockholders on the performance of firms, in addition to the endogeneity of ownership. It also contributes by utilising the alternative ownership classification system developed by the National University of Singapore.
Citation	International Journal of Managerial Finance, 6(4), p. 264-289
ISSN	1758-6569 1743-9132
Link	https://hdl.handle.net/1959.11/7021
Language	en
Publisher	Emerald Publishing Limited
Title	State-dominant and non-state-dominant ownership concentration and firm performance: Evidence from China
Type of document	Journal Article
Entity Type	Publication

State-dominant and non-state-dominant ownership concentration and firm performance: Evidence from China

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