The Impact of Ownership and Ownership Concentration on the Performance of China’s Listed Firms

Ma, Shiguang; Naughton (Deceased), Tony; Tian, Gary Gang

doi:10.2139/ssrn.1395588

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The Impact of Ownership and Ownership Concentration on the Performance of China’s Listed Firms

39 Pages Posted: 27 Apr 2009 Last revised: 17 Jun 2009

See all articles by Shiguang Ma

Shiguang Ma

University of Wollongong - School of Accounting Economics and Finance

Tony Naughton (Deceased)

Royal Melbourne Institute of Technolog (RMIT University) - School of Economics, Finance and Marketing; Financial Research Network (FIRN)

Gary Gang Tian

Macquarie University - Department of Applied Finance and Actuarial Studies; Macquarie University, Macquarie Business School

Date Written: April 27, 2009

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 conduct simplex, interactive and joint analyses. We find that ownership concentration is approximately associated with higher firm performance. Ownership concentration is more powerful than any category of ownership in determining firm performance. Firm performance is better when the state is the largest of the top shareholders and/or institutions dominate ownership among the top tradable shareholders. Our results support the theory that high ownership concentration mitigates the agency problem.

Keywords: China, ownership, concentration, performance

JEL Classification: G32, G34

Suggested Citation: Suggested Citation

Ma, Shiguang and Naughton (Deceased), Tony and Tian, Gary Gang, The Impact of Ownership and Ownership Concentration on the Performance of China’s Listed Firms (April 27, 2009). Available at SSRN: https://ssrn.com/abstract=1395588 or http://dx.doi.org/10.2139/ssrn.1395588