Abstract
This paper selects 850 state-owned listed enterprises from 2009 to 2014 in China's Shanghai and Shenzhen Stock Exchange to explore the impact of ownership structure on corporate performance from the perspective of ultimate ownership, and takes the endogeneity of ownership structure into deeper consideration. The study finds that ultimate ownership has no significant influence on corporate performance in state-owned enterprises. The separation of two rights and corporate performance shows a significant inverse U-shaped relationship. Taking the institutional environment into account, the inverse U-shaped relationship only exists in areas with poor institutional environment. To a certain degree, there exists the endogeneity of ownership structure.
Highlights
State-owned enterprises play an important role in the national economy, especially in the public services, natural monopolies and national security
Zhou Yixiang’s study on 509 listed companies from 1999 to 2008 finds that there is mutual influence between ownership structure and corporate performance with endogeneity controlled, and the dynamic impact weakly exists between ownership structure and corporate performance, which depends on different indicators of performance (Zhou, 2012)
This paper aims at the impact of ownership structure on corporate performance from the perspective of ultimate ownership theory, we select ultimate ownership, ultimate control right and the degree of separation to measure ownership structure
Summary
State-owned enterprises play an important role in the national economy, especially in the public services, natural monopolies and national security. It is an urgent problem to arrange the ownership structure of state-owned enterprises. The existing literatures mainly use the first largest shareholder to study its impact on corporate performance. The existing empirical studies tend to support that the ownership structure is exogenous, Demsetz et al firstly propose the endogeneity of ownership structure that the ownership structure is the result of trade-offs, there is no fixed relationship between ownership structure and corporate performance (Demsetz, 1983). This paper, from the perspective of ultimate ownership, takes state-owned listed companies in the new era as samples to study the relationship between ownership structure and corporate performance, with more comprehensive consideration of the endogeneity of ownership structure. Vol 10, No 1; 2017 is the literature review, the third is the research design, and the fourth is empirical analysis, and the conclusions and implications
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