Leverage, profitability and the ownership structures of listed firms in China

Paper


Hovey, Martin T.. 2007. "Leverage, profitability and the ownership structures of listed firms in China ." Moshirian, Fariborz (ed.) 20th Annual Australasian Finance and Banking Conference (AFBC 2007). Sydney, Australia 12 - 14 Dec 2007 Sydney, Australia.
Paper/Presentation Title

Leverage, profitability and the ownership structures of listed firms in China

Presentation TypePaper
Authors
AuthorHovey, Martin T.
EditorsMoshirian, Fariborz
Journal or Proceedings TitleProceedings of the 20th Australasian Finance and Banking Conference (AFBC 2007)
Number of Pages26
Year2007
Place of PublicationSydney, Australia
ISBN9780980476507
Web Address (URL) of Paperhttp://www.banking.unsw.edu.au/afbc
Conference/Event20th Annual Australasian Finance and Banking Conference (AFBC 2007)
Event Details
20th Annual Australasian Finance and Banking Conference (AFBC 2007)
Event Date
12 to end of 14 Dec 2007
Event Location
Sydney, Australia
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.

Keywordsstate-owned enterprises; ownership structures; capital structure; emerging markets; China
ANZSRC Field of Research 2020350706. International business
350799. Strategy, management and organisational behaviour not elsewhere classified
380115. Public economics - taxation and revenue
Public Notes

No evidence of copyright restrictions.

Byline AffiliationsSchool of Accounting, Economics and Finance
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