Disproportionate ownership structure and IPO long-run performance of non-SOEs in China
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.
IPO, Long-run performance, Disproportionate ownership, Non-SOEs firms
China Economic Review
CAO, Xiaping and TIAN, GAYR.
Disproportionate ownership structure and IPO long-run performance of non-SOEs in China. (2005). China Economic Review. 32, 27-42. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/4360