Ownership Forms and Firm Value in Chinese Corporate Governance

By Helen Wei Hu and On Kit Tam.

Published by The Organization Collection

Format Price
Article: Print $US10.00
Article: Electronic $US5.00

The current literature on ownership structure of China’s publicly listed companies has been characterized by divergent conceptual descriptions and mixed empirical findings. As a result, findings on relationship between various definitions of ownership forms and firm performance are often inconsistent and not comparable across studies. This study employs an analytically more direct and empirically straightforward classification of ownership forms to investigate how ownership may affect the market valuation of the Chinese companies.

We examine 308 publicly listed companies over the period of 2001-03 and find significant differences in firm value between ownership forms. Our results suggest that state ownership is less efficient than other ownership forms. Firms controlled directly or indirectly by the state often exhibit high ownership concentration and poor firm performance, whereas firms with legal-person ownership are less concentrated and able to achieve higher firm value.

Keywords: Corporate Governance, Ownership Form, Firm Value, China

International Journal of Knowledge, Culture and Change Management, Volume 8, Issue 7, pp.1-10. Article: Print (Spiral Bound). Article: Electronic (PDF File; 617.468KB).

Dr. Helen Wei Hu

Lecturer, Department of Management and Marketing, The University of Melbourne, Melbourne, VIC, Australia

Dr. Helen Wei Hu is a lecturer in the Department of Management and Marketing at the University of Melbourne, Australia. Her research interests are corporate governance, Chinese business and management, and corporate social responsibility. Dr. Hu currently is also an Honorary Research Fellow at Monash University, Australia. She holds a PhD from Monash University, Australia and a BSc (Honors) from the University of London, UK.

Prof. On Kit Tam

Deputy Dean (International), Faculty of Business and Economics, Monash University, Melbourne, VIC, Australia

Professor On Kit Tam is Deputy Dean, International in the Faculty of Business and Economics, Monash University, Australia. He has previously held academic and managerial positions at the University of New South Wales, Australia, the Treasury Department of the Australian Government and Philips Hong Kong. His research interests include corporate governance, financial and corporate development in Asia Pacific, and foreign direct investment and economic development. He currently serves as an independent director of a financial joint venture between two major Australian and Chinese financial institutions.

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