scholarly journals The impact of state ownership on share price informativeness: The case of the Split Share Structure Reform in China

2012 ◽  
Vol 44 (4) ◽  
pp. 248-261 ◽  
Author(s):  
Wenxuan Hou ◽  
Jing-Ming Kuo ◽  
Edward Lee
Keyword(s):  
State Ownership ◽  
Share Price ◽  
Price Informativeness ◽  
Split Share Structure Reform ◽  
Split Share Structure ◽  
Share Structure ◽  
The Impact

scholarly journals Split share structure reform and earnings informativeness in China

2012 ◽  
Vol 10 (1) ◽  
pp. 499-514 ◽  
Author(s):  
Haiyan Jiang ◽  
Ahsan Habib
Keyword(s):  
Agency Problems ◽  
Market Place ◽  
Minority Shareholders ◽  
Earnings Informativeness ◽  
Split Share Structure Reform ◽  
Split Share Structure ◽  
Regulatory Commission ◽  
Cash Flow Rights ◽  
Share Structure ◽  
The Impact

This paper investigates the impact of split share structure reform on earnings informativeness in China. A unique institutional feature of China was the co-existence of two types of share that endowed all shareholders with equal voting and cash flow rights but different tradability. This split share structure significantly constrained the tradability of shares held by the state and ‘legal persons’ and has been the alleged cause of severe agency problems between controlling shareholders and minority shareholders. In order to overcome these agency problems, the Chinese Securities Regulatory Commission (CSRC) mandated the conversion of non-tradable shares (NTS) into tradable shares (TS) from 2006 onwards. Although the regulation did not directly address the issue of the effect of this reform on the informativeness of earnings, we believe that the emphasis given by the CSRC to the concept of ‘price discovery’ during reform has relevance for testing earnings informativeness. NTS holders can sell their shares gradually in the market with a 12 month lock-up period. This provides an opportunity for TS holders with more time to better evaluate corporate governance and firm performance of reforming companies which is expected to encourage NTS holders to provide better quality accounting information into the market place. We find support for increased earnings informativeness hypothesis in the post reform period.

scholarly journals Friend or Foe? The Role of State and Mutual Fund Ownership in the Split Share Structure Reform in China

2010 ◽  
Vol 45 (3) ◽  
pp. 685-706 ◽  
Author(s):  
Michael Firth ◽  
Chen Lin ◽  
Hong Zou
Keyword(s):  
Mutual Fund ◽  
State Ownership ◽  
Compensation Ratio ◽  
Compensation Package ◽  
Negative Effect ◽  
Split Share Structure Reform ◽  
Split Share Structure ◽  
Share Structure ◽  
Positive Effect

AbstractThe recent split share structure reform in China involves the nontradable shareholders proposing a compensation package to the tradable shareholders in exchange for the listing rights of their shares. We find that state ownership (the major owners of nontradable shares) has a positive effect on the final compensation ratio. In contrast, mutual fund ownership (the major institutional owner of tradable shares) has a negative effect on the compensation ratio and especially in state-owned firms. The evidence is consistent with our predictions that state shareholders have incentives to complete the reform quickly and exert political pressure on mutual funds to accept the terms without a fight.

Empirical Study on the Impact of Split-Share Structure Reform on the Performance of Chinese Listed Companies

2011 ◽  
Vol 219-220 ◽  
pp. 103-106
Author(s):  
Shao Bing Yan ◽  
Juan Guo ◽  
Chun Qing Song ◽  
Wen Qi Zhu
Keyword(s):  
Public Life ◽  
Listed Companies ◽  
Information Technology Industry ◽  
Technology Industry ◽  
Economic Area ◽  
Chinese Listed Companies ◽  
Split Share Structure Reform ◽  
Split Share Structure ◽  
Share Structure ◽  
The Impact

This paper selected some listed companies of the manufacturing and information technology industry that have achieved full circulation by the end of 2008 and used factor analysis to study the impact on performance after the split share structure reform. By comparing horizontally and vertically, it came to the split share structure reform does improve corporate performance of listed companies in China; and then it analyzed the performance of listed companies on public life and economic area.

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