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Asia-Pacific Financial Markets

, Volume 19, Issue 3, pp 233–258 | Cite as

Crossing the River by Touching Stones?: The Reform of Corporate Ownership in China

Article

Abstract

The privatization of Chinese enterprises in a low-legal-protection environment raises the question as to how minority shareholders are assured that their capital will not be expropriated. This paper sheds some light on this issue by examining the influence of controlling shareholders on the corporate performance of listed firms from 1997 to 2006. The first main finding is that firms controlled by local governments are more valuable to minority shareholders, whereas firms controlled by individuals are less valuable. The second main finding is that the post-WTO-accession relinquishment of control from local governments to private shareholders appears to have reduced corporate performance.

Keywords

Protection of minority shareholders Partial privatization China Insider expropriation 

JEL Classification

G32 G34 L33 P31 

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Copyright information

© Springer Science+Business Media, LLC. 2011

Authors and Affiliations

  1. 1.Queen’s University Management SchoolQueen’s University BelfastBelfastNorthern Ireland

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