Ownership Structure, Corporate Governance and Firm Value: Evidence from Chinese Listed Companies

2010 ◽  
Author(s):  
Jenny Jung-wha Lee ◽  
Zhihua Zhang
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Firm Value ◽  
Listed Companies ◽  
Chinese Listed Companies

scholarly journals Ownership structure, board of directors and firm performance: evidence from Taiwan

2019 ◽  
Vol 19 (1) ◽  
pp. 189-216 ◽  
Author(s):  
Mao-Feng Kao ◽  
Lynn Hodgkinson ◽  
Aziz Jaafar
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Firm Value ◽  
Listed Companies ◽  
Independent Directors ◽  
Data Set ◽  
Content Type ◽  
Listed Firms

PurposeUsing a data set of listed firms domiciled in Taiwan, this paper aims to empirically assess the effects of ownership structure and board of directors on firm value.Design/methodology/approachUsing a sample of Taiwanese listed firms from 1997 to 2015, this study uses a panel estimation to exploit both the cross-section and time–series nature of the data. Furthermore, two stage least squares (2SLS) regression model is used as robustness test to mitigate the endogeneity issue.FindingsThe main results show that the higher the proportion of independent directors, the smaller the board size, together with a two-tier board system and no chief executive officer duality, the stronger the firm’s performance. With respect to ownership structure, block-holders’ ownership, institutional ownership, foreign ownership and family ownership are all positively related to firm value.Research limitations/implicationsAlthough the Taiwanese corporate governance reform concerning the independent director system which is mandatory only for newly-listed companies is successful, the regulatory authority should require all listed companies to appoint independent directors to further enhance the Taiwanese corporate governance.Originality/valueFirst, unlike most of the previous literature on Western developed countries, this study examines the effects of corporate governance mechanisms on firm performance in a newly industrialised country, Taiwan. Second, while a number of studies used a single indicator of firm performance, this study examines both accounting-based and market-based firm performance. Third, this study addresses the endogeneity issue between corporate governance factors and firm performance by using 2SLS estimation, and details the econometric tests for justifying the appropriateness of using 2SLS estimation.

scholarly journals Corporate governance and firm performance: evidence from the Chinese stock markets

2008 ◽  
Vol 5 (4) ◽  
pp. 471-480 ◽  
Author(s):  
Jing Chi ◽  
Guang Zeng
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Market Performance ◽  
Listed Companies ◽  
Legal Person ◽  
Special Treatment ◽  
Stock Exchanges ◽  
Cross Sectional ◽  
Chinese Listed Companies

In this paper, we investigate how ownership structure affects the market performance of the Chinese publicly listed companies. The sample consists of all firms listed in the Shanghai and Shenzhen Stock Exchanges from 1998 to 2001. We find that a firm’s market performance is positively related to the proportion of legal person shares but negatively related to the proportion of shares owned by the state. Using cross-sectional regressions, we further find that corporate value decreases with a firm’s increasing leverage and size, while surprisingly foreign ownership does not increase a firm’s market performance. Moreover, ST (Special Treatment) firms are used to test the effectiveness of corporate governance in China, and our results show that the change of ownership structure cannot improve the firm performance of Chinese listed companies

Ownership Structure and Corporate Governance - A Empirical Study of Chinese Listed Companies

2011 ◽  
Vol 225-226 ◽  
pp. 1314-1317
Author(s):  
Duo Jiao Tan ◽  
Si Lin Yu
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Listed Companies ◽  
Governance Structure ◽  
Current Status ◽  
Policy Recommendations ◽  
Analysis Method ◽  
Equity Structure ◽  
Cross Sectional ◽  
Chinese Listed Companies

Based on the cross-sectional data and from the shareholding structure, this paper analyzes the current status of ownership structure of Chinese listed companies, with ROE as the measure of the efficiency of corporate governance. It uses the regression analysis method to study the equity structure effects of listed corporate governance empirically. The conclude points out the factors of imperfect governance structure and the resolutions of that, as well as the policy recommendations of optimizing the ownership structure of listed companies and improving the governance structure.

scholarly journals The board of directors and firm performance: empirical evidence from listed companies

2019 ◽  
Vol 19 (3) ◽  
pp. 508-551 ◽  
Author(s):  
Alessandro Merendino ◽  
Rob Melville
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Agency Theory ◽  
Ownership Structure ◽  
Listed Companies ◽  
Independent Directors ◽  
Board Structure ◽  
Board Size ◽  
Ceo Duality ◽  
Content Type

PurposeThis study aims to reconcile some of the conflicting results in prior studies of the board structure–firm performance relationship and to evaluate the effectiveness and applicability of agency theory in the specific context of Italian corporate governance practice.Design/methodology/approachThis research applies a dynamic generalised method of moments on a sample of Italian listed companies over the period 2003-2015. Proxies for corporate governance mechanisms are the board size, the level of board independence, ownership structure, shareholder agreements and CEO–chairman leadership.FindingsWhile directors elected by minority shareholders are not able to impact performance, independent directors do have a non-linear effect on performance. Board size has a positive effect on firm performance for lower levels of board size. Ownership structure per se and shareholder agreements do not affect firm performance.Research limitations/implicationsThis paper contributes to the literature on agency theory by reconciling some of the conflicting results inherent in the board structure–performance relationship. Firm performance is not necessarily improved by having a high number of independent directors on the board. Ownership structure and composition do not affect firm performance; therefore, greater monitoring provided by concentrated ownership does not necessarily lead to stronger firm performance.Practical implicationsThis paper suggests that Italian corporate governance law should improve the rules and effectiveness of minority directors by analysing whether they are able to impede the main shareholders to expropriate private benefits on the expenses of the minority. The legislator should not impose any restrictive regulations with regard to CEO duality, as the influence of CEO duality on performance may vary with respect to the unique characteristics of each company.Originality/valueThe results enrich the understanding of the applicability of agency theory in listed companies, especially in Italy. Additionally, this paper provides a comprehensive synthesis of research evidence of agency theory studies.

Form versus substance: The effect of ownership structure and corporate governance on firm value in Thailand

2012 ◽  
Vol 36 (6) ◽  
pp. 1722-1743 ◽  
Author(s):  
J. Thomas Connelly ◽  
Piman Limpaphayom ◽  
Nandu J. Nagarajan
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Firm Value ◽  
Form Versus

Corporate governance: institutional arrangement or market choice?

2014 ◽  
Vol 8 (4) ◽  
pp. 717-744 ◽  
Author(s):  
Mian Du ◽  
Siyan Chen ◽  
Huan Shao
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Institutional Arrangement ◽  
Listed Companies ◽  
Managerial Ownership ◽  
Governance Mechanism ◽  
Director Compensation ◽  
Content Type ◽  
Market Choice ◽  
Corporate Governance Mechanism

Purpose – The purpose of this paper is to investigate the relationship between corporate governance mechanism and firm value of the listed companies in China. Does the better corporate governance lead to the higher firm value? Or does the higher firm value make it easy to choose a better governance mechanism? Or they affect each other? In other words, this paper tries to answer whether the corporate governance mechanism is only decided by institutional arrangement, or by market choice according to firm value or performance or by the interaction of institutional arrangement and market choice? It tries to answer whether institutional arrangement maximizes the firm value, or an invisible hand pushes them to arrive at its maximum. Design/methodology/approach – This paper establishes an analytic framework of simultaneous equations based on causality, which includes five endogenous variables: ownership of larger shareholders, managerial ownership, director compensation, debt financing and firm value. It adopts 1,644 data samples from 274 Chinese listed companies in Shanghai and Shenzhen Stock Exchange during 2007- 2012 after the non-tradable shares reform. Ordinary least squares (OLS) estimation of single equation, 2SLS and 3SLS estimation of simultaneous equations are respectively done to show the differences of these three kinds of estimations. Findings – The empirical results show that differences exist among OLS, 2SLS and 3SLS estimation. Finally, 3SLS estimation should be adopted because the OLS and 2SLS estimation are biased. There are endogenous relationships between corporate governance mechanism and firm value. Through the 3SLS estimation, it is found that first, ownership concentration and firm value affect each other positively. Second, managerial ownership and firm value affect each other positively; third, director compensation and firm value affect each other negatively, while director compensation and firm performance affect each other positively. Finally, debt financing level and firm value are negatively related to each other. Practical implications – It means that ownership of large shareholders, managerial ownership, director compensation and debt financing in the Chinese listed companies are found to have a root in the interaction between institutional arrangement and market choice. It is also found that adverse selection occurs when creditors loan to the listed companies. Managerial compensation is positively related to accounting profit, but it is negatively related to firm value because managers increase profit due by earning management. This could only increase the accounting profits and obtain huge cash compensation, but not increase firm value and even harm the interests of shareholders. Originality/value – This paper not only shows the difference between OLS and 2SLS estimation but also compares the estimation of 2SLS and 3SLS in terms of empirical methods. It gives answers to the following questions: whether the relationship is one-way causality or bilateral causality between ownership concentration, managerial ownership, director compensation and firm value; whether governance mechanism affects firm value by institutional arrangement, or market drives both of them to strike a balance by an invisible hand. In other words, does it make them arrive at equilibrium through the competitive selection process when shareholders, directors, managers and creditors attempt to maximize themselves of their interests?

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