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Non‐controlling Large Shareholders and Firm Performance in China
Author(s) -
Yan Caiyu,
He Hongqu
Publication year - 2018
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.12216
Subject(s) - shareholder , corporate governance , investment (military) , representation (politics) , business , finance , political science , law , politics
This paper examines the determination of non‐controlling large shareholders ( NCLS s) on firm performance and investigates the impacts of NCLS s on tunneling and investment efficiency. We use three attributes of NCLS s (ownership, identity, and relational board/management representation) to fully capture the governance effects of NCLS s. We find robust evidence that NCLS s are associated with higher firm performance. Furthermore, we also document that NCLS s promote investment efficiency. However, except for individual investors, the other items in NCLS s deteriorate tunneling. Additionally, except for mutual funds, we find that the other governance effects of NCLS s are stable under different circumstances.