Corporate governance and firm value : evidence from Chinese state-controlled listed firms

Noel W. LEUNG, Mei Ai CHENG

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

10 Citations (Scopus)

Abstract

The association between corporate governance and firm value has been extensively studied in Chinese listed firms. Based on the characteristics of their ultimate shareholders, Chinese listed firms can be categorised as (1) central state-controlled, (2) local state-controlled or (3) non-state-controlled. Some scholars have described Chinese government policy as '. zhuada fangxiao', thus suggesting that the corporate governance mechanisms (CGMs) of central state-controlled listed firms (SCLFs) are better than those of local state-controlled listed firms. Therefore, this paper specifically examines the influence of CGMs on the value of central SCLFs and local SCLFs. Analysis of 2006 firm-year observations from 2007 to 2009 suggests that the aggregate ownership of other large shareholders and the remuneration of top executives exhibit different effects on firm value in central and local SCLFs. The results also provide evidence that there is no endogenous effect of firm value on the ownership of the largest shareholder in central and local SCLFs.
Original languageEnglish
Pages (from-to)89-112
Number of pages24
JournalChina Journal of Accounting Research
Volume6
Issue number2
Early online date28 Apr 2013
DOIs
Publication statusPublished - Jun 2013

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Corporate governance
Firm value
Corporate governance mechanisms
Large shareholders
Ownership
Government policy
Shareholders
Remuneration

Keywords

  • Corporate governance
  • State-owned enterprises
  • State-controlled listed firms
  • Firm value

Cite this

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title = "Corporate governance and firm value : evidence from Chinese state-controlled listed firms",
abstract = "The association between corporate governance and firm value has been extensively studied in Chinese listed firms. Based on the characteristics of their ultimate shareholders, Chinese listed firms can be categorised as (1) central state-controlled, (2) local state-controlled or (3) non-state-controlled. Some scholars have described Chinese government policy as '. zhuada fangxiao', thus suggesting that the corporate governance mechanisms (CGMs) of central state-controlled listed firms (SCLFs) are better than those of local state-controlled listed firms. Therefore, this paper specifically examines the influence of CGMs on the value of central SCLFs and local SCLFs. Analysis of 2006 firm-year observations from 2007 to 2009 suggests that the aggregate ownership of other large shareholders and the remuneration of top executives exhibit different effects on firm value in central and local SCLFs. The results also provide evidence that there is no endogenous effect of firm value on the ownership of the largest shareholder in central and local SCLFs.",
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Corporate governance and firm value : evidence from Chinese state-controlled listed firms. / LEUNG, Noel W.; CHENG, Mei Ai.

In: China Journal of Accounting Research, Vol. 6, No. 2, 06.2013, p. 89-112.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

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AU - LEUNG, Noel W.

AU - CHENG, Mei Ai

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N2 - The association between corporate governance and firm value has been extensively studied in Chinese listed firms. Based on the characteristics of their ultimate shareholders, Chinese listed firms can be categorised as (1) central state-controlled, (2) local state-controlled or (3) non-state-controlled. Some scholars have described Chinese government policy as '. zhuada fangxiao', thus suggesting that the corporate governance mechanisms (CGMs) of central state-controlled listed firms (SCLFs) are better than those of local state-controlled listed firms. Therefore, this paper specifically examines the influence of CGMs on the value of central SCLFs and local SCLFs. Analysis of 2006 firm-year observations from 2007 to 2009 suggests that the aggregate ownership of other large shareholders and the remuneration of top executives exhibit different effects on firm value in central and local SCLFs. The results also provide evidence that there is no endogenous effect of firm value on the ownership of the largest shareholder in central and local SCLFs.

AB - The association between corporate governance and firm value has been extensively studied in Chinese listed firms. Based on the characteristics of their ultimate shareholders, Chinese listed firms can be categorised as (1) central state-controlled, (2) local state-controlled or (3) non-state-controlled. Some scholars have described Chinese government policy as '. zhuada fangxiao', thus suggesting that the corporate governance mechanisms (CGMs) of central state-controlled listed firms (SCLFs) are better than those of local state-controlled listed firms. Therefore, this paper specifically examines the influence of CGMs on the value of central SCLFs and local SCLFs. Analysis of 2006 firm-year observations from 2007 to 2009 suggests that the aggregate ownership of other large shareholders and the remuneration of top executives exhibit different effects on firm value in central and local SCLFs. The results also provide evidence that there is no endogenous effect of firm value on the ownership of the largest shareholder in central and local SCLFs.

KW - Corporate governance

KW - State-owned enterprises

KW - State-controlled listed firms

KW - Firm value

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