Analysis on the Largest Shareholders' Impact on Corporate Governance and Performance

Xu Xiaodong & Chen Xiaoyue (School of Management,Tsinghua University)  

This paper studies the relationships between the largest shareholders and the effectiveness of corporate governance. For 508 listed firms over the 1997-2000 period in China, we find that firms under the control of the government shareholder have lower value, poorer firm performance and weaker governance than the comparable firms under the control of a non-government shareholder; the change of the controlling shareholders is propitious to the improvement of governance effectiveness, scale economics and more professional management. The results suggest that the decreasing of state shares and the increasing control markets are playing an important role in improving firm reforms and corporate governance.

【Key Words】： the largest shareholders   ownership structure   corporate governance   firm performance

【CateGory Index】： F276.6
【DOI】： cnki:ISSN:0577-9154.0.2003-02-006

http://en.cnki.com.cn/Article_en/CJFDTOTAL-JJYJ200302006.htm