Deakin University
Browse

File(s) under permanent embargo

The effect of ownership structure on leverage decision: new evidence from Chinese listed firms

journal contribution
posted on 2011-01-01, 00:00 authored by Q Liu, Gang Tian, X Wang
This paper examines the effect of state control and ownership structure on the leverage decision of firms listed in the Chinese stock market. Our results show that state-owned enterprises (SOEs) have higher leverage ratios than non-SOEs, and SOEs in regions with a poorer institutional environment have higher leverage ratios than SOEs in better regions. We also show that the largest shareholding (the percentage of shares held by the largest shareholder) in the SOEs has a negative relationship with the leverage ratio, while the largest shareholding in non-SOEs has a non-linear relationship with the short-term and long-term debt ratios. Finally, this study also shows that the share split reform and the improvement of institutional environment both weaken the negative relationship and strengthen the positive relationship between largest shareholding and leverage of SOEs and non-SOEs to some extent. This paper documents how the financing behaviour of SOEs is more influenced by government intervention, while the financing behaviour of non-SOEs is more market oriented.

History

Journal

Journal of the Asia Pacific economy

Volume

16

Issue

2

Pagination

254 - 276

Publisher

Taylor & Francis

Location

Oxford, Eng.

ISSN

1354-7860

eISSN

1469-9648

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal; C Journal article

Copyright notice

2011, Taylor & Francis

Usage metrics

    Research Publications

    Categories

    No categories selected

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC