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Article: Corporate ownership, equity risk and returns in the People's Republic of China
Title | Corporate ownership, equity risk and returns in the People's Republic of China |
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Authors | |
Keywords | Agency Theory China Equity Risk Governance Ownership Performance |
Issue Date | 2008 |
Publisher | Palgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jibs/index.html |
Citation | Journal Of International Business Studies, 2008, v. 39 n. 7, p. 1149-1168 How to Cite? |
Abstract | A large body of literature has examined how managerial ownership affects corporate strategy and risk-taking. The present study extends this literature by investigating the effect of other forms of corporate ownership on a firm's equity risk (measured as the volatility of a company's stock returns) and stock returns in the People's Republic of China (PRC) - an important emerging economy that is rich in various forms of corporate ownership. We find that the various types of corporate ownership appear to have important but different impacts on equity risk and returns. In particular, companies with more state ownership tend to have higher stock volatility and lower stock returns; in contrast, companies with more legal-person ownership tend to have lower stock volatility and higher stock returns. Foreign and managerial ownership are found to have little effect on firms' equity risk and returns. These findings support the predictions of agency theory - for example, that state ownership increases agency conflicts in companies because bureaucrats and state agencies do not have the same economic incentives to maximize the value of firms. We believe that our study contributes to the international business literature on investment strategy and risk assessment in developing markets such as China, and as a result our findings could have important implications for international investors. © 2008 Academy of International Business All rights reserved. |
Persistent Identifier | http://hdl.handle.net/10722/188457 |
ISSN | 2023 Impact Factor: 8.6 2023 SCImago Journal Rankings: 4.600 |
ISI Accession Number ID | |
References |
DC Field | Value | Language |
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dc.contributor.author | Zou, H | en_US |
dc.contributor.author | Adams, MB | en_US |
dc.date.accessioned | 2013-09-03T04:07:39Z | - |
dc.date.available | 2013-09-03T04:07:39Z | - |
dc.date.issued | 2008 | en_US |
dc.identifier.citation | Journal Of International Business Studies, 2008, v. 39 n. 7, p. 1149-1168 | en_US |
dc.identifier.issn | 0047-2506 | en_US |
dc.identifier.uri | http://hdl.handle.net/10722/188457 | - |
dc.description.abstract | A large body of literature has examined how managerial ownership affects corporate strategy and risk-taking. The present study extends this literature by investigating the effect of other forms of corporate ownership on a firm's equity risk (measured as the volatility of a company's stock returns) and stock returns in the People's Republic of China (PRC) - an important emerging economy that is rich in various forms of corporate ownership. We find that the various types of corporate ownership appear to have important but different impacts on equity risk and returns. In particular, companies with more state ownership tend to have higher stock volatility and lower stock returns; in contrast, companies with more legal-person ownership tend to have lower stock volatility and higher stock returns. Foreign and managerial ownership are found to have little effect on firms' equity risk and returns. These findings support the predictions of agency theory - for example, that state ownership increases agency conflicts in companies because bureaucrats and state agencies do not have the same economic incentives to maximize the value of firms. We believe that our study contributes to the international business literature on investment strategy and risk assessment in developing markets such as China, and as a result our findings could have important implications for international investors. © 2008 Academy of International Business All rights reserved. | en_US |
dc.language | eng | en_US |
dc.publisher | Palgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jibs/index.html | en_US |
dc.relation.ispartof | Journal of International Business Studies | en_US |
dc.subject | Agency Theory | en_US |
dc.subject | China | en_US |
dc.subject | Equity Risk | en_US |
dc.subject | Governance | en_US |
dc.subject | Ownership | en_US |
dc.subject | Performance | en_US |
dc.title | Corporate ownership, equity risk and returns in the People's Republic of China | en_US |
dc.type | Article | en_US |
dc.identifier.email | Zou, H: hongzou@hku.hk | en_US |
dc.identifier.authority | Zou, H=rp01800 | en_US |
dc.description.nature | link_to_subscribed_fulltext | en_US |
dc.identifier.doi | 10.1057/palgrave.jibs.8400394 | en_US |
dc.identifier.scopus | eid_2-s2.0-53549100167 | en_US |
dc.relation.references | http://www.scopus.com/mlt/select.url?eid=2-s2.0-53549100167&selection=ref&src=s&origin=recordpage | en_US |
dc.identifier.volume | 39 | en_US |
dc.identifier.issue | 7 | en_US |
dc.identifier.spage | 1149 | en_US |
dc.identifier.epage | 1168 | en_US |
dc.identifier.isi | WOS:000259723700004 | - |
dc.publisher.place | United Kingdom | en_US |
dc.identifier.scopusauthorid | Zou, H=12769328900 | en_US |
dc.identifier.scopusauthorid | Adams, MB=7403905632 | en_US |
dc.identifier.issnl | 0047-2506 | - |