American Journal of Theoretical and Applied Business
Volume 2, Issue 2, June 2016, Pages: 8-12
Received: Sep. 17, 2016;
Accepted: Oct. 17, 2016;
Published: Oct. 28, 2016
Views 3269 Downloads 86
Zhi-hong Song, Institute of Management and Decision, Shanxi University, Taiyuan, China
Xiao-fei Che, School of Economics and Management, Shanxi University, Taiyuan, China
Yan-xin Guo, School of Mathematical Sciences, Shanxi University, Taiyuan, China
Taking the 141 related party cooperation announcements by Chinese listed companies from January 2001 to December 2013 as the sample, the article investigates the impact of the focal firms’ ownership structure and relative characteristics of related parties on the focal firms’ value creation. The empirical results indicate that ownership concentration negatively affect the value creation, while equity restriction has no influence on the focal firms’ value creation. The related party’s relative scale plays a significantly positive role on the focal firms’ value creation, while the related party’s relative associated relationship is negatively related to the focal firms’ value creation. The article contributes to the current literature by investigating whether the governance mechanism of listed companies could create value for the focal firms under the background of related party cooperation, and providing empirical evidence about the influence of ownership structure and relative characteristics of related party on the focal firms’ value creation.
Related Party Cooperation, Ownership Structure and Value Creation, American Journal of Theoretical and Applied Business.
Vol. 2, No. 2,
2016, pp. 8-12.
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/
) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Cheung, Y. L., Rau, P. R. and Stouraitis, A. (2006).Tunneling, propping and expropriation: Evidence from connected party transactions in Hong Kong. Journal of Financial Economics. 82(2): 343-386.
Djankov, S., La Porta, R., Lopezde-Silanes, F. and Shleifer, A. (2008). The law and Economics of self dealing. Journal of Financial Economics, 88(3): 430-465.
Demsetz, H., Villalonga, B. (2001). Ownership structure and corporate performance. Journal of Corporate Finance, 7(3): 209-233.
Shleifer, A. and Vishny, R. (1986). Large shareholders and corporate control. Journal of Political Economy, 94(3): 461-488.
Liu, F. and Ho, J. (2004). Ownership structure and substantial shareholders’ choice in interest realizing methods: Tentative study on tunneling in Chinese capital market. China Accounting Review, 2(1): 141-158.(In Chinese).
Xu, L., Xin, Y. and Chen, G. (2006). Ownership concentration, outside blockholders, and operating performance: Evidence from China’s listed companies. Economic Research Journal,41(1): 90-100. (In Chinese).
Liu, Y.and Gao, Y. (2007). The relationship between ownership restriction and corporate performance of listed companies in China. Journal of Sun Yatsen University (Social Science Edition), 47(4):102-108. (In Chinese).
McConnell, J. and Servaes, H. (1990). Additional evidence on equity ownership and corporate value. Journal of Financial Economics, 27(2): 596 - 612.
Leech, D. and Leahy, J. (1991). Ownership structure, control type classifications and the performance of large British companies. The Economic Journal, 101(409):1418-1437.
Mudambi, R., and Nicosia, C. (1998).Ownership structure and firm performance: Evidence from the UK financial services industry. Applied Financial Economics, 8:175-180.
Crutchley, C., Guo, E. and Hansen, R. (1991). Stockholder benefits from Japanese-U.S. joint ventures. Financial Management, 20(4): 22-30.
McConnell, J. and Nantell, T. (1985). Corporate combinations and common stock returns: the case of joint ventures. Journal of Finance, 40(2): 519-536.
Liu, S. (2007). The paradox of private benefits of control and excessive benefits of control: A new theoretical explanation of large shareholders’ expropriation of small ones. Economic Research Journal, (2): 85-96. (In Chinese).
Rao, Y., Zhang, Y. and Peng, D. (2008).Holding proportion, over guarantee and tunneling: evidence from the guarantee of Chinese listed companies to their subsidiaries. Nankai Business Review, 11(1): 31-38. (In Chinese).