Ownership and Ownership Concentration: Which is More Important in Determining the Performance of China's Listed Firms?
Accounting and Finance, Forthcoming
39 Pages Posted: 16 Sep 2014
Date Written: September 14, 2014
Abstract
This paper investigates the impact of ownership and ownership concentration on the performance of China’s listed firms. By recognizing the differences between ownership and ownership concentration, and between total ownership concentration and tradable ownership concentration, we find that ownership concentration is more powerful than any category of ownership in determining firm performance and that it has approximately positive linear relations with firm value. The tradable ownership concentration has a more significant and positive influence on firm performance than total ownership concentration. The highest level of firm performance is approached when a firm is characterized with both total ownership concentration and tradable ownership concentration. Thus, we conclude that it is a rule that ownership concentration enhances firm performance regardless of who the concentrated owners are.
Keywords: ownership, concentration, performance, state, legal person, tradable shares
JEL Classification: G32; G34
Suggested Citation: Suggested Citation