Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74107
Authors: 
Bortolotti, Bernardo
Beltratti, Andrea
Year of Publication: 
2006
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 131.2006
Abstract: 
Nontradable shares (NTS) are an unparalleled feature of the ownership structure of Chinese listed companies and represented a major hurdle to domestic financial market development. After some failed attempts, in 2005 the Chinese authorities have launched a structural reform program aiming at eliminating NTS. In this paper, we evaluate the stock price effects of the actual implementation of this reform in 368 firms. The NTS reform generated a statistically significant 8 percent positive abnormal return over the event window, adjusting prices for the compensation requested by tradable shareholders. Results are consistent with the expectation of improved economic fundamentals such as better corporate governance and enhanced liquidity.
Subjects: 
Chinese Equity Market
Financial Market Development
Split-Share Structure
JEL: 
G14
G28
G32
Document Type: 
Working Paper

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