Ownership Structure and Firm Value in China's Privatized Firms: 1991-2001

43 Pages Posted: 27 Oct 2007

See all articles by Zuobao Wei

Zuobao Wei

University of Texas at El Paso

Feixue Xie

University of Texas at El Paso - College of Business Administration - Department of Economics and Finance

Shaorong Zhang

Marshall University

Abstract

This paper investigates the relation between ownership structure and firm value across a sample of 5,284 firm years of China's partially privatized former state-owned enterprises (SOE) from 1991-2001. We find that state and institutional shares are significantly negatively related to Tobin's Q, and that significant convex relations exist between Q and state shares, as well as between Q and institutional shares. We also find that foreign ownership is significantly positively related to Tobin's Q. We test for potential endogeneity of ownership, and find that Q and state/foreign ownership are not jointly determined. We also test for time-series, industry, and geo-economic location effects, and find our results to be robust.

Suggested Citation

Wei, Zuobao and Xie, Feixue and Zhang, Shaorong, Ownership Structure and Firm Value in China's Privatized Firms: 1991-2001. Journal of Financial and Quantitative Analysis (JFQA), Vol. 40, No. 1, pp. 87-108, March 2005, Available at SSRN: https://ssrn.com/abstract=939054

Zuobao Wei (Contact Author)

University of Texas at El Paso ( email )

500 W. University Ave.
El Paso, TX 79968
United States
915-747-5381 (Phone)
915-747-6282 (Fax)

Feixue Xie

University of Texas at El Paso - College of Business Administration - Department of Economics and Finance ( email )

500 W. University Ave.
El Paso, TX 79968
United States
915-747-7788 (Phone)
915-747-6268 (Fax)

Shaorong Zhang

Marshall University ( email )

Huntington, WV 25755-2300
United States

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