Corporate Governance and Firm Value During the Global Financial Crisis: Evidence from China

Posted: 19 Oct 2010 Last revised: 28 Aug 2012

See all articles by Chunyan Liu

Chunyan Liu

Kyushu University

Konari Uchida

Kyushu University

Yufeng Yang

China University of Mining and Technology (CUMT)

Date Written: January 12, 2012

Abstract

We find that Chinese state-owned enterprises (SOEs) that performed poorly before the global financial crisis performed better during the crisis, especially when they relied on bank debt. This suggests that state ownership mitigates financial constraints during times of financial crisis. Large shareholders’ ownership has a U-shaped relation to crisis-period performance, which suggests ownership concentration mitigates financial constraints and engenders expropriation problems. We also find that managerial ownership is positively associated with crisis-period performance of SOEs. This result suggests that managerial ownership mitigates expropriation problems in SOEs. Finally, Chinese firms that adopted a reputable accounting auditor experienced a small reduction in firm value during the global financial crisis.

Keywords: Financial crisis, Corporate governance, State-owned enterprises, Managerial ownership, China

JEL Classification: G01, G30, G32, G38

Suggested Citation

Liu, Chunyan and Uchida, Konari and Yang, Yufeng, Corporate Governance and Firm Value During the Global Financial Crisis: Evidence from China (January 12, 2012). International Review of Financial Analysis, Vol. 21, 2012. Available at SSRN: https://ssrn.com/abstract=1693087 or http://dx.doi.org/10.2139/ssrn.1693087

Chunyan Liu

Kyushu University ( email )

6-19-1, Hakozaki, Higashiku
Fukuoka, 812-8581
Japan

Konari Uchida (Contact Author)

Kyushu University ( email )

6-19-1, Hakozaki, Higashiku
Fukuoka, 812-8581
Japan
+81-92-642-2463 (Phone)

Yufeng Yang

China University of Mining and Technology (CUMT) ( email )

Xuzhou, Jiangsu
China

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