Corporate governance and firm value during the global financial crisis: Evidence from China

Chunyan Liu, Konari Uchida, Yufeng Yang

Research output: Contribution to journalArticle

42 Citations (Scopus)

Abstract

We find that Chinese state-owned enterprises (SOEs) that performed poorly before the global financial crisis performed better during the crisis, especially when they relied on bank debt. This suggests that state ownership mitigates financial constraints during times of financial crisis. Large shareholders' ownership has a U-shaped relation to crisis-period performance, which suggests ownership concentration mitigates financial constraints and engenders expropriation problems. We also find that managerial ownership is positively associated with crisis-period performance of SOEs. This result suggests that managerial ownership mitigates expropriation problems in SOEs. Finally, Chinese firms that adopted a reputable accounting auditor experienced a small reduction in firm value during the global financial crisis.

Original languageEnglish
Pages (from-to)70-80
Number of pages11
JournalInternational Review of Financial Analysis
Volume21
DOIs
Publication statusPublished - Jan 1 2012

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Firm value
Global financial crisis
China
State-owned enterprises
Corporate governance
Managerial ownership
Expropriation
Financial constraints
Large shareholders
Ownership
Financial crisis
Auditors
Bank debt
Ownership concentration
Chinese firms
State ownership

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Cite this

Corporate governance and firm value during the global financial crisis : Evidence from China. / Liu, Chunyan; Uchida, Konari; Yang, Yufeng.

In: International Review of Financial Analysis, Vol. 21, 01.01.2012, p. 70-80.

Research output: Contribution to journalArticle

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