The link between ownership structure, tradability and performance - implications for the Chinese A-share reform

Jiang, Bing-Bing. (2006). The link between ownership structure, tradability and performance - implications for the Chinese A-share reform Honours Thesis, School of Business, The University of Queensland.

       
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Author Jiang, Bing-Bing.
Thesis Title The link between ownership structure, tradability and performance - implications for the Chinese A-share reform
School, Centre or Institute School of Business
Institution The University of Queensland
Publication date 2006
Thesis type Honours Thesis
Total pages 113
Language eng
Subjects 1503 Business and Management
Formatted abstract This thesis examines two historical relationships that underlie the government's motives for implementing the A-share reform in China, the relationship between government ownership and performance, and the relationship between tradable shares and performance. Furthermore, this thesis also provides some preliminary evidence on the effect of the A-share reform on performance. Introduced on April 29, 2005, the Chinese A-share reform converts companies' non-tradable shares into tradable shares, and allows them to be sold incrementally following a 12-months lock up period. Motivated by the government's high expectation for this policy, the study finds two key results. Contrary to the government's belief, increasing the tradable share proportion does not necessarily result in improved performance. Contrary to the views of existing literature, reducing government ownership does not necessarily result in improved performance. Implications are therefore formed on the A-share reform. If the A-share reform is a single pronged strategy that simply makes all shares tradable, then it is unlikely to result in improvements in corporate governance. If the A-share reform leads to either an increase in the proportion of shares held by individual investors (tradable shares) or a decrease in the proportion of shares held by government agencies (government shares), then corporate governance and firm performance may actually get worse. Hence the study concludes that a more comprehensive approach that goes beyond tradability is required to rejuvenate the stock market and improve firm performance.

 
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Created: Tue, 09 Nov 2010, 16:16:45 EST by Muhammad Noman Ali on behalf of The University of Queensland Library