Government Ownership and the Capital Structure of Firms: Analysis of an Institutional Context from China

Xiaohong Huang, Rezaul Kabir, Lingling Zhang

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)
238 Downloads (Pure)

Abstract

Emerging economies provide interesting scenarios for examining how institutional context influences the financing behavior of firms. In this study, we examine the capital structure of Chinese listed firms following the Split-Share Structure Reform of 2005. This reform allowed a reduction of government ownership by making government shares tradable. We find that the impact of government ownership on leverage is dependent on whether the government is the largest shareholder in a firm and whether the government ownership is through a parent state-owned enterprise. In addition, we document that the largest non-government shareholder positively influences leverage. Overall, our results reveal that the largest controlling shareholder, either government or non-government, has a significant impact on the capital structure of Chinese firms.
Original languageEnglish
Pages (from-to)171-185
Number of pages15
JournalChina Journal of Accounting Research
Volume11
Issue number3
Early online date9 Aug 2018
DOIs
Publication statusPublished - 1 Sep 2018
Event2017 Summer Research Workshop of China Journal of Accounting Research - City University of Hong Kong, Hong Kong , Hong Kong
Duration: 21 Jul 201722 Jul 2017

Keywords

  • Capital structure
  • China
  • Government ownership
  • Leverage
  • Ownership

Fingerprint Dive into the research topics of 'Government Ownership and the Capital Structure of Firms: Analysis of an Institutional Context from China'. Together they form a unique fingerprint.

  • Cite this