Government Shareholding and the Value of China's Modern Firms
61 Pages Posted: 12 Feb 2002
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
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