Institutional Ownership and Stock Returns  On Chinese Firms

36 Pages Posted: 19 Jan 2023

See all articles by Min Huang

Min Huang

Guangzhou University

Hai Jiang

Jinan University

Zhiyuan Ning

Jinan University

Jun Tu

Singapore Management University - Lee Kong Chian School of Business

Abstract

Using data on Chinese firms with the unique state ownership structure of state-owned enterprises (SOEs), we examine whether institutional investors can help reduce the required returns on equity for SOEs or non-SOEs, and if so, the underlying channels. We find that an increase in the shareholdings of institutions, especially independent institutions, can reduce the required returns. This effect is more prominent in non-SOEs than in SOEs, indicating that state ownership may limit the effect by which institutional investors reduce the required returns. In addition, institutional investors promote corporate social responsibility in invested firms and may thereby reduce the required returns on equity.

Keywords: Institutional investors, Stock returns, Corporate Social Responsibility, Chinese firms, State-owned enterprises

Suggested Citation

Huang, Min and Jiang, Hai and Ning, Zhiyuan and Tu, Jun, Institutional Ownership and Stock Returns  On Chinese Firms. Available at SSRN: https://ssrn.com/abstract=4330102 or http://dx.doi.org/10.2139/ssrn.4330102

Min Huang

Guangzhou University ( email )

Guangzhou Higher Education Mega Center
Waihuanxi Road 230
Guangzhou, 510006
China

Hai Jiang (Contact Author)

Jinan University ( email )

Zhiyuan Ning

Jinan University ( email )

Jun Tu

Singapore Management University - Lee Kong Chian School of Business ( email )

50 Stamford Road
#04-01
Singapore, 178899
Singapore

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