The Helping Hand of the State in Chinese Real Estate Firms: Anti-corruption and Liberalization
International Real Estate Review, 2016, Vol 19 (1), 51-97.
47 Pages Posted: 21 Apr 2014 Last revised: 4 Jan 2017
Date Written: January 5, 2016
We show that the traditional western style corporate governance tools are ineffective in Chinese real estate firms from 2000 to 2012. Instead, we find evidence of effective state governance such as corruption cleanups and financial market liberalization. Specifically, the less state-connected firms experience better performance in provinces with greater corruption prosecutions and after 2006 with accelerated stock market liberalization. Overall, our results suggest that the Chinese real estate industry is becoming more market-oriented with state’s assistance.
Keywords: Corporate Governance, Executive Compensation, Emerging Market, Agency Issues, Real Estate Company, China
JEL Classification: G3, G35, G38, R33
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