Leverage, profitability and the ownership structures of listed firms in China

Hovey, Martin T. (2007) Leverage, profitability and the ownership structures of listed firms in China. In: 20th Australasian Finance and Banking Conference (AFBC 2007) , 12-14 Dec 2007, Sydney, Australia.

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Official URL: http://www.banking.unsw.edu.au/afbc

Abstract

The relationship between leverage, profitability and a firm’s ownership structure in China is investigated in this paper. It is an exploratory study based on all firms listed on the Shanghai and Shenzhen stock exchanges from 1999 to 2005. The results of the empirical analysis are reported in this paper. The most significant result is that foreign holdings are found to have a significant relationship with the leverage of listed firms in China. Whereas, somewhat unexpectedly, institutional ownership, through legal person holding companies, state ownership and private holdings are not found to have a significant relationship with the capital structure choices of firms in China. The results also suggest that some firm-specific factors that are relevant for explaining firm leverage generally referred to in studies in developed economies, such as profitability, growth opportunities, size and tax shields, are also relevant in China. The age of the firms and the industry to which they principally belong also has significant bearing. Yet direct government grants and the use of an internationally renowned auditing firm do not show a significant relationship.

Item Type:	Conference or Workshop Item (Commonwealth Reporting Category E) (Paper)
Additional Information:	No evidence of copyright restrictions.
Uncontrolled Keywords:	state-owned enterprises; ownership structures; capital structure; emerging markets; China
Fields of Research (FOR2008):	15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150308 International Business 15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150303 Corporate Governance and Stakeholder Engagement 14 Economics > 1402 Applied Economics > 140215 Public Economics-Taxation and Revenue
Subjects:	340000 Economics 350000 Commerce, Management, Tourism and Services > 350200 Business and Management > 350212 International Business 350000 Commerce, Management, Tourism and Services > 350300 Banking, Finance and Investment > 350301 Finance
Socio-Economic Objective (SEO2008):	B Ecomonic Development > 91 Economic Framework > 9104 Management and Productivity > 910405 Public Sector Productivity
ID Code:	3767
Deposited By:	Dr Martin Hovey
Deposited On:	22 Jan 2008 09:34
Last Modified:	18 Jun 2012 16:41

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