Ownership structures and the leverage of listed firms in China

Paper

Hovey, Martin. 2007. "Ownership structures and the leverage of listed firms in China ." Walker, Gordon (ed.) 14th Annual Global Finance Conference (GFC2007). Melbourne, Australia 02 - 05 Apr 2007 Melbourne, Australia.
Paper/Presentation Title

Ownership structures and the leverage of listed firms in China

Presentation TypePaper
Authors
AuthorHovey, Martin
EditorsWalker, Gordon
Journal or Proceedings TitleProceedings of the 14th Annual Global Finance Conference
Number of Pages24
Year2007
Place of PublicationMelbourne, Australia
Conference/Event14th Annual Global Finance Conference (GFC2007)
Event Details
14th Annual Global Finance Conference (GFC2007)
Event Date
02 to end of 05 Apr 2007
Event Location
Melbourne, Australia
Abstract

In this paper the relationship between leverage, performance and a firm’s ownership structure is investigated. It is an exploratory study based on listed firms in China, that is all firms listed on the Shanghai and Shenzhen stock exchanges from 1999 to 2005. The results of an empirical analysis of ownership structures and the leverage 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.

KeywordsState-owned enterprises, ownership structures, capital structure, emerging markets, Chinese business
ANZSRC Field of Research 2020380107. Financial economics
Public Notes

File reproduced in accordance with the copyright policy of the publisher/author.

Byline AffiliationsDepartment of Finance and Banking
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