Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338449 
Year of Publication: 
2021
Citation: 
[Journal:] China Journal of Accounting Studies (CJAS) [ISSN:] 2169-7221 [Volume:] 9 [Issue:] 2 [Year:] 2021 [Pages:] 221-246
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
More and more Chinese-listed companies report the loss of controlling shareholders in recent years. This seems to be a boon to the Chinese capital market, which is plagued by tunnelling from controlling shareholders. Employing the absence of controlling shareholders as a novel event, this study analyzes its influence on management rent-seeking behaviour, as measured by management trading abnormal return. The results show that absence of controlling shareholders will lead to higher abnormal returns for management on share transactions. A channel analysis shows that information asymmetry and equity incentives are two moderators in the association between absence of controlling shareholders and management trading abnormal return. The results also show that the effect is less pronounced for companies with a high equity concentration and a high level of analysts following, and for companies facing a highly developed financial environment. Thus, although the type-II agency problem disappears when companies lose controlling shareholders, the type-I agency problem could be worse.
Subjects: 
Controlling shareholders
insider control
management trading
abnormal return
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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