Ownership Structure, Corporate Governance and Firm Value: Evidence from Chinese Listed Companies

34 Pages Posted: 18 Dec 2010 Last revised: 18 Feb 2011

See all articles by Jenny Jung-wha

Jenny Jung-wha

Australian National University (ANU)

Zhihua Zhang

Yanbian University

Date Written: December 16, 2010

Abstract

This study investigates the effects of ownership structures and corporate governance on firms' performance in the Chinese capital market, which is in the early developmental stage of a socialist market economy. First, we examined companies that issued "A" stock listed on Shanghai and Shenzhen Stock Exchanges from 2004-2007 to analyze the effects of various facets of ownership structures and corporate governance on firms' values. Second, we examined the firms' performances under varying proportions of state ownership to examine the impact on ownership structures and corporate governance.

Factors of ownership governing structures, such as state ownerships, largest shareholder ownership, and managerial ownership were found to negatively affect the firms' values. We also examined the effect of interactions between firms' performances and corporate governance structures on board independence and the existence of audit committees on the valuation of firms with high performance values.

Keywords: Firm value, Ownership structures, Corporate governance, China

Suggested Citation

Lee, Jung-wha and Zhang, Zhihua, Ownership Structure, Corporate Governance and Firm Value: Evidence from Chinese Listed Companies (December 16, 2010). Finance and Corporate Governance Conference 2011 Paper. Available at SSRN: https://ssrn.com/abstract=1726592 or http://dx.doi.org/10.2139/ssrn.1726592

Jung-wha Lee (Contact Author)

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 0200
Australia
61261252270 (Phone)

Zhihua Zhang

Yanbian University

Gongyuan Road 977
Yanji City, Jilin 133002
China

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