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Full-Text Articles in Business
Disproportionate Ownership Structure And Ipo Long-Run Performance Of Non-Soes In China, Xiaoming Wang, Jerry Cao, Qigui Liu, Jinghua Tang, Gary Tian
Disproportionate Ownership Structure And Ipo Long-Run Performance Of Non-Soes In China, Xiaoming Wang, Jerry Cao, Qigui Liu, Jinghua Tang, Gary Tian
Gary Tian
This paper examines the relationship between ownership structures and IPO long-run performance of non-SOEs in China. Although non-SOEs underperform the market in general after IPO but the poor performance is mainly caused by the IPOs with ownership control wedge. Non-SOEs with one share one vote structure outperform those with control-ownership wedge by 30% for three years post-IPO performance in adjusted buy-and-hold returns. Non-SOEs with control-ownership wedge have higher frequency of undertaking value-destroying related party transactions. These findings suggest that non-SOEs need to improve corporate governance such as disproportionate ownership structure to better safeguard the interest of long-run shareholders.
Does Banks' Dual Holding Affect Bank Lending And Firms' Investment Decisions? Evidence From China, Xiaofei Pan, Gary Tian
Does Banks' Dual Holding Affect Bank Lending And Firms' Investment Decisions? Evidence From China, Xiaofei Pan, Gary Tian
Gary Tian
This study investigates the effect of banks' dual holding on bank lending and firms' investment decisions using a sample of listed firms in China. We find that dual holding leads to easier access to bank loans, a result that is more pronounced for non-state-owned enterprises (non-SOEs) than SOEs. We also find that dual holding distorts banks' lending decisions and harms the investment efficiency for SOEs, while resulting in optimal lending decisions and enhanced investment efficiency for non-SOEs. For non-SOEs, further analysis suggests that optimal lending decisions and efficient investment can be achieved for firms with higher ownership concentration, and firms …
Does Bank Ownership Imply Efficient Monitoring? Evidence From Bank Lending And Firm Investment Efficiencies In China, Gary G. Tian, Xiaofei Pan
Does Bank Ownership Imply Efficient Monitoring? Evidence From Bank Lending And Firm Investment Efficiencies In China, Gary G. Tian, Xiaofei Pan
Gary Tian
This study investigates the effect of bank ownership on lending and firm investment efficiencies to give reasons for the mixed evidence that exists on the impact of bank ownership on firm performance. Using China's listed firms as an example, we find that bank ownership reduces the efficiency of bank lending and harms investment efficiency for state-owned enterprises (SOEs), while simultaneously relating to optimal lending decisions and enhanced investment efficiency for non-SOEs. Our findings suggest that banks monitor non-SOEs effectively, but are less effective at monitoring SOEs. We document that banks' ex post monitoring on non-SOEs' investment policy results from their …
Bank Connection, Corruption And Collateral In China, Xiaofei Pan, Gary Tian
Bank Connection, Corruption And Collateral In China, Xiaofei Pan, Gary Tian
Gary Tian
Using a sample of China's listed entrepreneurial firms, we investigate the relationship between bank connection, corruption and collateral requirements. We find that when a firm is connected with banks, collateral requirements are significantly lower. We also find that bank connection is the channel through which corruption is exercised to benefit those firms with favoured loan terms. Our analysis further reveals that bank connection and corruption have jointly improved bank lending efficiency. However, these positive effects become weaker with government intervention in the form of an economic stimulus package. We argue that in an emerging market, bank connection facilitates rent seeking …
Interactions Among China-Related Stocks: Evidence From A Causality Test With A New Procedure, Gary Gang Tian, Guang Hua Wan
Interactions Among China-Related Stocks: Evidence From A Causality Test With A New Procedure, Gary Gang Tian, Guang Hua Wan
Gary Tian
The purpose of this study is to investigate a causal relationship among five different indices of shares issued by Chinese firms, A-, B- and H-shares listed in China and Hong Kong. This paper re-examines the interactions among these China-related stocks using daily time series data by constructing a vector autoregresion (VAR) model. A new Granger no-causality testing procedure developed by Toda and Yamamoto (1995) was applied to test the causality link among these five stock indices. The results emerging from our research indicate that there are "closed" relations within A-share (as well as within B-share) between Shanghai and Shenzhen markets …
Venture Capital And Executive Incentives In China, Jerry Cao, Qigui Liu, Gary G. Tian
Venture Capital And Executive Incentives In China, Jerry Cao, Qigui Liu, Gary G. Tian
Gary Tian
This paper examines the effect that venture capital (VC) has on the pay-performancerelationship in listed Chinese firms. We find that VC has a significantly positive effect onCEO compensation and the pay-performance relationship, such effect particularly stronger infirms needing more managerial efforts and discretions (higher growth opportunity or higherlevels of capital expenditure). In addition, we show that VC-backed firms with moremanagerial discretions are more likely to use stock options. The evidence suggests thatventure capital investors use more sensitive compensation contract for top executives inChinese when the need for managerial discretion is greater. Such compensation schemes byVCs enhance firm performance subsequently.