The relationship between valuation and ownership of listed firms in China

Article

Hovey, Martin, Li, Larry and Naughton, Tony. 2003. "The relationship between valuation and ownership of listed firms in China." Corporate Governance (Oxford): an international review. 11 (2), pp. 112-122. https://doi.org/10.1111/1467-8683.00012
Article Title

The relationship between valuation and ownership of listed firms in China

ERA Journal ID33012
Article CategoryArticle
AuthorsHovey, Martin (Author), Li, Larry (Author) and Naughton, Tony (Author)
Journal TitleCorporate Governance (Oxford): an international review
Journal Citation11 (2), pp. 112-122
Number of Pages11
Year2003
PublisherJohn Wiley & Sons
Place of PublicationChichester, West Sussex. United Kingdom
ISSN0964-8410
1467-8683
Digital Object Identifier (DOI)https://doi.org/10.1111/1467-8683.00012
Web Address (URL)http://www.blackwell-synergy.com/doi/pdf/10.1111/1467-8683.00012
Abstract

This paper investigates the relationship between firm performance and corporate governance in China. Firm performance is measured by Tobin's Q, while corporate governance is determined based on ownership structure and concentration. Prior research, in both China and elsewhere,
indicates that ownership structure and concentration have a significant impact on firm performance. The paper builds on previous studies by investigating the complex structure of
different share classes that are typical of Chinese listed firms.
The paper reports the results of an empirical study of a sample of firms listed on the Shanghai and Shenzhen stock markets over the period 1997-1999. The sample of firms selected represents a cross-section of industries, share classification, ownership type and ownership concentration. The paper reports a series of regressions that account for different specifications of firm valuation and ownership characteristics. The results indicate that ownership concentration has little explanatory power but ownership structure does matter. Legal person's shareholdings are positively related to firm valuation. The findings of the study are discussed in the context of the current enterprise reform process in China.

Keywordscorporate governance; firm valuation; China
ANZSRC Field of Research 2020350710. Organisational behaviour
380109. Industry economics and industrial organisation
350799. Strategy, management and organisational behaviour not elsewhere classified
Public Notes

Copyright 2003 Blackwell Publishing.

Byline AffiliationsDepartment of Finance and Banking
Griffith University
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