Ultimate Government Control Structures and Firm Value: Evidence from Chinese Listed Companies
We show that 70% of Chinese listed companies are ultimately controlled by government agencies, thereby indicating that state ownership remains widespread in China's stock markets. Three questions are considered that are related to government control structures and their impact on firm value: (1...
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Online Access: | http://www.sciencedirect.com/science/article/pii/S1755309113600106 |
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doaj-c3fc21e3d0fa4380bd96855579da57672020-11-25T01:00:22ZengElsevierChina Journal of Accounting Research1755-30912009-06-012110112210.1016/S1755-3091(13)60010-6Ultimate Government Control Structures and Firm Value: Evidence from Chinese Listed CompaniesKun Wang0Xing Xiao1School of Economics and Management, Tsinghua University, ChinaSchool of Economics and Management, Tsinghua University, ChinaWe show that 70% of Chinese listed companies are ultimately controlled by government agencies, thereby indicating that state ownership remains widespread in China's stock markets. Three questions are considered that are related to government control structures and their impact on firm value: (1) how do government agencies maintain their control of listed companies; (2) what are the impacts of different government control structures on firm value; and (3) are these impacts different in local government and central government-controlled firms? We find that the Chinese government controls listed companies directly or indirectly through solely state-owned enterprises (SSOEs). Taking into account the trade-off between political and agency costs, we show that firm value increases when some control rights are decentralized from the government to state-owned enterprises (SOEs). Moreover, decentralization improves significantly the performance of local government- controlled, but not central government-controlled firms.http://www.sciencedirect.com/science/article/pii/S1755309113600106Government control structuresFirm valueAgency costsPolitical costsDecentralization |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Kun Wang Xing Xiao |
spellingShingle |
Kun Wang Xing Xiao Ultimate Government Control Structures and Firm Value: Evidence from Chinese Listed Companies China Journal of Accounting Research Government control structures Firm value Agency costs Political costs Decentralization |
author_facet |
Kun Wang Xing Xiao |
author_sort |
Kun Wang |
title |
Ultimate Government Control Structures and Firm Value: Evidence from Chinese Listed Companies |
title_short |
Ultimate Government Control Structures and Firm Value: Evidence from Chinese Listed Companies |
title_full |
Ultimate Government Control Structures and Firm Value: Evidence from Chinese Listed Companies |
title_fullStr |
Ultimate Government Control Structures and Firm Value: Evidence from Chinese Listed Companies |
title_full_unstemmed |
Ultimate Government Control Structures and Firm Value: Evidence from Chinese Listed Companies |
title_sort |
ultimate government control structures and firm value: evidence from chinese listed companies |
publisher |
Elsevier |
series |
China Journal of Accounting Research |
issn |
1755-3091 |
publishDate |
2009-06-01 |
description |
We show that 70% of Chinese listed companies are ultimately controlled by government agencies, thereby indicating that state ownership remains widespread in China's stock markets. Three questions are considered that are related to government control structures and their impact on firm value: (1) how do government agencies maintain their control of listed companies; (2) what are the impacts of different government control structures on firm value; and (3) are these impacts different in local government and central government-controlled firms? We find that the Chinese government controls listed companies directly or indirectly through solely state-owned enterprises (SSOEs). Taking into account the trade-off between political and agency costs, we show that firm value increases when some control rights are decentralized from the government to state-owned enterprises (SOEs). Moreover, decentralization improves significantly the performance of local government- controlled, but not central government-controlled firms. |
topic |
Government control structures Firm value Agency costs Political costs Decentralization |
url |
http://www.sciencedirect.com/science/article/pii/S1755309113600106 |
work_keys_str_mv |
AT kunwang ultimategovernmentcontrolstructuresandfirmvalueevidencefromchineselistedcompanies AT xingxiao ultimategovernmentcontrolstructuresandfirmvalueevidencefromchineselistedcompanies |
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1725213880538365952 |