Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103578
Authors: 
Luo, Jin-hui
Liu, Heng
Year of Publication: 
2014
Citation: 
[Journal:] International Journal of Financial Studies [ISSN:] 2227-7072 [Publisher:] MDPI [Place:] Basel [Volume:] 2 [Year:] 2014 [Issue:] 1 [Pages:] 103-121
Abstract: 
In this paper we investigate the relationship between family ownership structure and corporate value across a sample of 1314 firm-year observations of China's family publicly listed companies (PLCs), from 2004 to 2008. We find a significant inverse-U-shaped relationship between the controlling family's ultimate cash-flow rights and corporate value; as measured by Tobin's Q. That is, as family-ownership concentration increases, corporate value first increases and then decreases. This finding refreshes our understanding of the relationship between family-ownership concentration and corporate value in emerging economies such as found in China. We corroborate prior findings that when controlling families hold excess control over cash-flow rights, corporate value is significantly lowered, while multiple large shareholders structure is significantly associated with higher corporate value. In addition; board independence is found to significantly improve corporate value in the context of family-concentrated ownership. We also test for potential endogeneity between family ownership and corporate value and find our results to be robust.
Subjects: 
China
corporate value
family concentrated ownership
family firms
ultimate ownership structure
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article

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