Ownership Concentration, Foreign Shareholding, Audit Quality, and Stock Price Synchronicity: Evidence from China
45 Pages Posted: 30 Jun 2009
Date Written: June 5, 2009
Abstract
This paper investigates the effects of largest-shareholder ownership concentration, foreign ownership, and audit quality on the amount of firm-specific information incorporated into share prices, as measured by stock price synchronicity, of Chinese-listed firms over the 1996-2003 period. We show that synchronicity is a concave function of ownership by the largest shareholder with its maximum at an approximately 50% level. Further, we find that synchronicity is higher when the largest shareholder is government related. We also find that foreign ownership and auditor quality are inversely associated with synchronicity. Finally, we show that the amount of earnings information reflected in stock returns is lower for firms with high synchronicity.
Keywords: Ownership concentration, State ownership, Foreign ownership, Audit quality, Stock price synchronicity, China
JEL Classification: G14, G15, G24, G38
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Transparency, Financial Accounting Information, and Corporate Governance
By Robert M. Bushman and Abbie J. Smith
-
Financial Accounting Information and Corporate Governance
By Robert M. Bushman and Abbie J. Smith
-
What Determines Corporate Transparency?
By Robert M. Bushman, Joseph D. Piotroski, ...
-
The World Price of Earnings Opacity
By Utpal Bhattacharya, Hazem Daouk, ...
-
R-Squared Around the World: New Theory and New Tests
By Stewart C. Myers and Li Jin
-
R-Squared Around the World: New Theory and New Tests
By Stewart C. Myers and Li Jin
-
Does Greater Firm-Specific Return Variation Mean More or Less Informed Stock Pricing?
By Art Durnev, Randall Morck, ...
-
Does Greater Firm-Specific Return Variation Mean More or Less Informed Stock Pricing?
By Art Durnev, Randall Morck, ...
-
Analyst Activity Around the World
By James J. Chang, Tarun Khanna, ...