Government Shareholding and the Value of China's Modern Firms

61 Pages Posted: 12 Feb 2002

See all articles by Lihui Tian

Lihui Tian

Nankai University; University of London; Peking University - Department of Finance

Date Written: April 2001


This paper documents the ultimate shareholding structures of 826 corporations listed on China's stock market and finds large equity holdings of the government. Using a panel data set, this paper further finds that corporate value decreases with an increased size of government shareholding when the government is a small shareholder. When the government equity holding is sufficiently large, corporate value increases with increased government shareholding. This U-shaped relationship between government shareholding and corporate value is interpreted by the aggregated impacts of the grabbing and helping hands of the government shareholder.

Keywords: ownership structure, government shareholding, corporate governance

JEL Classification: G32, G34, G15, L33

Suggested Citation

Tian, George Lihui, Government Shareholding and the Value of China's Modern Firms (April 2001). Available at SSRN: or

George Lihui Tian (Contact Author)

Nankai University ( email )

Tianjin, 300071

University of London ( email )

Exhibition Road
London, WC1E 7HU
United Kingdom

Peking University - Department of Finance ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
+86 10 6275 7900 (Phone)
+86 10 6275 14763 (Fax)

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