State ownership and firm performance: Empirical evidence from Chinese listed companies

Yu, M. (2013) State ownership and firm performance: Empirical evidence from Chinese listed companies. China Journal of Accounting Research, 6 (2). pp. 75-87. ISSN 17553091 (ISSN)

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Abstract

While the relationship between state ownership and firm performance has been widely researched, the empirical evidence has provided mixed results. This study applies panel data regression techniques to 10,639 firm-year observations of non-financial Chinese listed firms during 2003-2010 to examine the relationship between state ownership and firm performance. The results show that state ownership has a U-shaped relationship with firm performance. The Split Share Structure Reform in 2005-2006 played a positive role in enhancing the relationship between state ownership and firm profitability ratios. Although state ownership decreased significantly after 2006, it remains high in strategically important industry sectors such as the oil, natural gas and mining sector and the publishing, broadcasting and media sector. The findings reveal that a higher level of state ownership is superior to a dispersed ownership structure due to the benefits of government support and political connections. The Split Share Structure Reform made previously non-tradable shares legally tradable, improving corporate governance and reducing the negative effect of non-tradable state shares. © 2013 .

Item Type: Article
Uncontrolled Keywords: China, Firm performance, Split Share Structure Reform, State ownership
Subjects: N400 Accounting
Divisions: UoA Collections > UoA19: Business and Management Studies
Faculty of Business, Law and Social Sciences > Birmingham City Business School > Dept. Accountancy and Finance
Depositing User: Hussen Farooq
Date Deposited: 14 Feb 2017 14:20
Last Modified: 14 Feb 2017 14:20
URI: http://www.open-access.bcu.ac.uk/id/eprint/2657

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