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

See all articles by Gang-Zhi Fan

Gang-Zhi Fan

School of Management, Guangzhou University

Zsuzsa R. Huszar

National University of Singapore ; Central European University

Weina Zhang

Department of Finance, National University of Singapore; National University of Singapore Risk Management Institute

Date Written: January 5, 2016

Abstract

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

Suggested Citation

Fan, Gang-Zhi and Huszar, Zsuzsa R. and Zhang, Weina, The Helping Hand of the State in Chinese Real Estate Firms: Anti-corruption and Liberalization (January 5, 2016). International Real Estate Review, 2016, Vol 19 (1), 51-97., Available at SSRN: https://ssrn.com/abstract=2427138 or http://dx.doi.org/10.2139/ssrn.2427138

Gang-Zhi Fan

School of Management, Guangzhou University ( email )

230 Wai Huan Xi Road
Guangzhou Higher Education Mega Center
Guangzhou, Guangdong 510006
China

Zsuzsa R. Huszar

National University of Singapore ( email )

Business School
15 Kent Ridge Drive
Singapore, 117592
Singapore
+65 6516 8017 (Phone)
+65 6779 2083 (Fax)

Central European University ( email )

Nador utca 9
Budapest, H-1051
Hungary

Weina Zhang (Contact Author)

Department of Finance, National University of Singapore ( email )

Mochtar Riady Building
15 Kent Ridge Drive
Singapore, 119245
Singapore
65168120 (Phone)
67792083 (Fax)

HOME PAGE: http://bizfaculty.nus.edu/faculty-profiles/108-weina

National University of Singapore Risk Management Institute ( email )

21 Heng Mui Keng Terrace
Level 4
Singapore, 119613
Singapore

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