Ownership Structure, Corporate Governance and IPO Post-Listing Liquidity

41 Pages Posted: 30 Jan 2014

See all articles by Junheng Zhu

Junheng Zhu

Queensland University of Technology - School of Economics and Finance

Peter Verhoeven

Queensland University of Technology - QUT Business School; Financial Research Network (FIRN)

Janice C. Y. How

Queensland University of Technology; Financial Research Network (FIRN)

Date Written: January 28, 2014

Abstract

This paper investigates how ownership concentration and structure and corporate governance relate to the post-listing liquidity of IPO firms, where the latter is measured by various dimensions of trading activity, breadth, and depth. Using a sample of 1,049 Chinese IPOs issued on the Shanghai and Shenzhen Stock Exchanges over the 2001-2010 period, we find firms with a broader shareholder base and higher ownership concentration have greater post-listing liquidity. So do firms with a higher state ownership and lower institution ownership. Corporate governance is also important in explaining the cross-sectional differences in post-listing liquidity; specifically, post-listing liquidity is higher for firms with CEO duality, a larger and more independent board, and more frequent board meetings. The 2005 Split Share Structure Reform, which increased the proportion of tradable shares, has a positive impact on liquidity.

Keywords: IPO, Post-listing liquidity, Ownership, Corporate governance, China

JEL Classification: G30, G34, G38

Suggested Citation

Zhu, Junheng and Verhoeven, Peter and How, Janice C. Y., Ownership Structure, Corporate Governance and IPO Post-Listing Liquidity (January 28, 2014). Available at SSRN: https://ssrn.com/abstract=2386797 or http://dx.doi.org/10.2139/ssrn.2386797

Junheng Zhu (Contact Author)

Queensland University of Technology - School of Economics and Finance ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

Peter Verhoeven

Queensland University of Technology - QUT Business School ( email )

GPO Box 2434
Brisbane, Queensland 4001
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Janice C. Y. How

Queensland University of Technology ( email )

2 George Street
Brisbane, Queensland 4000
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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