Title

Disproportionate ownership structure and IPO long-run performance of non-SOEs in China

Publication Type

Journal Article

Publication Date

7-2005

Abstract

This paper examines the relationship between ownership structures and IPO long-run performance of non-SOEs in China. Although non-SOEs underperform the market in general after IPO but the poor performance is mainly caused by the IPOs with ownership control wedge. Non-SOEs with one share one vote structure outperform those with control-ownership wedge by 30% for three years post-IPO performance in adjusted buy-and-hold returns. Non-SOEs with control-ownership wedge have higher frequency of undertaking value-destroying related party transactions. These findings suggest that non-SOEs need to improve corporate governance such as disproportionate ownership structure to better safeguard the interest of long-run shareholders.

Keywords

IPO, Long-run performance, Disproportionate ownership, Non-SOEs firms

Discipline

Business

Research Areas

Finance

Publication

China Economic Review

Volume

32

First Page

27

Last Page

42

ISSN

1043-951X

Identifier

10.1016/j.chieco.2014.11.004

Publisher

Elsevier

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