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Corporate Governance Reform and State Ownership: Evidence from China
Author(s) -
Lu Yao,
Shi Xinzheng
Publication year - 2012
Publication title -
asia‐pacific journal of financial studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.375
H-Index - 15
eISSN - 2041-6156
pISSN - 2041-9945
DOI - 10.1111/ajfs.12001
Subject(s) - corporate governance , state ownership , china , business , government (linguistics) , competition (biology) , agency (philosophy) , product market , sample (material) , agency cost , market economy , market competition , state (computer science) , principal–agent problem , emerging markets , accounting , economics , shareholder , finance , philosophy , algorithm , law , ecology , linguistics , chemistry , computer science , biology , epistemology , chromatography , political science , incentive
Using a sample of propensity‐score matched overseas and domestically listed firms, we examine whether the effect of corporate governance reform ( CGR ) in 2001 in China varies among firms with different ownership structures. The positive effect of the CGR is weaker for firms with more state‐owned shares, and product market competition increases the effect of the CGR on such firms. These findings suggest that government regulations on corporate governance and market competition can serve as complementary solutions to agency problems that arise from state ownership.