The Experts below are selected from a list of 360 Experts worldwide ranked by ideXlab platform
Wenxuan Hou - One of the best experts on this subject based on the ideXlab platform.
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the impact of State Ownership on share price informativeness the case of the split share structure reform in china
British Accounting Review, 2012Co-Authors: Wenxuan Hou, Jingming Kuo, Edward LeeAbstract:This study examines the impact of State Ownership on share price informativeness using the unique setting of the Split Share Structure Reform in China. This reform abolishes the trading restriction on shares held mainly by State shareholders. In doing so, it renders State shareholders' wealth more sensitive to share price movements and decreases their conflict of interests with private shareholders. This change is expected to strengthen the corporate governance incentives of State shareholders and reduce the information asymmetry in Chinese listed firms. This prediction is confirmed through empirical evidence of increased share price informativeness among firms that are more sensitive to the impact of this reform, i.e. those with more State Ownership or restricted shares. These findings imply that this reform benefits the information environment and minority shareholders in the Chinese stock market.
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the impact of State Ownership on share price informativeness the case of the split share structure reform in china
2011Co-Authors: Wenxuan Hou, Jingming Kuo, Edward LeeAbstract:We examine the impact of State Ownership on share price informativeness by using the unique setting of the Split Share Structure Reform in China. This reform abolishes the trading restriction of shares held mainly by State shareholders, which in turn renders their wealth more sensitive to share price movement and decreases their conflict of interest with private shareholders. We expect this change to strengthen the corporate governance incentives of State shareholders and reduce the information asymmetry of Chinese listed firms. We confirm this prediction through empirical evidence of increased share price informativeness among firms that are more sensitive to the impact of this reform, i.e. those with more State Ownership or restricted shares. Our finding implies that this reform benefits the information environment and minority shareholders of the Chinese stock market.
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player and referee roles held jointly the effect of State Ownership on china s regulatory enforcement against fraud
Social Science Research Network, 2010Co-Authors: Wenxuan Hou, Geoff MooreAbstract:This paper examines the impact of the prevailing State Ownership in the Chinese stock market on corporate governance and the financial regulatory system respectively as the internal and external monitoring mechanisms to deter corporate fraud and protect investors. In line with the literature that State Ownership exaggerates the agency problem, we find that the retained State Ownership in privatised firms increases the incidence of regulatory enforcements against fraud. For the State-owned enterprises (SOEs), however, larger State Ownership is associated with a lower incidence of enforcement actions. This is attributed to the mutual political affiliation of the fraudulent SOEs and the regulatory commission. A new regulation “Solutions for Listed Firm Checks” promulgated in March 2001 has mitigated this effect by empowering the regulatory commission to increase the severity of regulatory conditions. Our evidence confirms the improvement in the regulatory environment and investor protection in the Chinese stock market brought about by the regulatory reform and development.
Narjess Boubakri - One of the best experts on this subject based on the ideXlab platform.
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State Ownership and debt structure
Review of Corporate Finance, 2021Co-Authors: Narjess Boubakri, Ruiyuan Chen, Sadok El Ghoul, Omrane GuedhamiAbstract:We provide the first firm-level evidence of the relation between State Ownership and debt structure. Using an international sample of newly privatized firms (NPFs) from 76 countries over the 1998–2017 period, we find that State Ownership is associated with a more diversified debt structure. This evidence is more pronounced for higher levels of State control, and is robust to accounting for endogeneity, using alternative samples, and controlling for other owner types. Additional analysis shows that our main evidence is consistent with the soft budget constraint, political, and social views of State Ownership. Our results have several policy implications for financial system stability and the efficient allocation of financial resources in the economy.
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State Ownership and stock liquidity evidence from privatization
Journal of Corporate Finance, 2020Co-Authors: Narjess Boubakri, Ruiyuan Chen, Sadok El Ghoul, Omrane Guedhami, Robert C NashAbstract:Abstract We provide unique firm-level evidence of the relation between State Ownership and stock liquidity. Using a broad sample of newly privatized firms (NPFs) from 53 countries over the period 1994–2014, our study identifies a non-monotonic association between State Ownership and stock liquidity. The inverse U-shaped relation is consistent with trade-offs between costs and benefits of State Ownership and suggests an optimal level of government shareholdings that maximizes stock liquidity of NPFs. We further identify that the inflection point from the cost/benefit trade-off is contingent upon characteristics of the nation's institutional environment.
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post privatization State Ownership and bank risk taking cross country evidence
Journal of Corporate Finance, 2020Co-Authors: Narjess Boubakri, Sadok El Ghoul, Omrane Guedhami, Mahmud HossainAbstract:Abstract We examine the relation between State residual Ownership and bank risk-taking for privatized banks from 45 countries. Applying propensity score matching, we find that privatized banks tend to exhibit higher levels of risk-taking post-privatization than their publicly listed non-privatized counterparts. Moreover, partially privatized banks exhibit higher levels of risk-taking than fully privatized banks. We also observe a positive and significant relation between the level of residual State Ownership and risk-taking. These findings are consistent with the distorted objectives associated with government control, as suggested by the political benefits of control, and with the soft budget constraint views of State Ownership. The distortion can be mitigated by the quality of a country's institutional and regulatory environments. Finally, our results show that the effect of State Ownership on risk-taking is more pronounced in countries with a higher dominance of State-owned enterprises, and it was more prevalent during the global financial crisis.
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national culture and privatization the relationship between collectivism and residual State Ownership
Journal of International Business Studies, 2016Co-Authors: Narjess Boubakri, Omrane Guedhami, Chuck C Y Kwok, Walid SaffarAbstract:Using a large hand-collected database of 605 privatized firms from 48 countries, we examine the relationship between the collectivism measure of culture and residual State Ownership in privatized firms. We find that the continued role of government in privatized firms is positively related to collectivism. This result is robust to using alternative measures of collectivism and government control, as well as when we address the endogeneity of collectivism. Finally, we examine the economic outcomes of culture at the firm level, focusing primarily on performance, efficiency, risk-taking, and valuation measures. We report that privatized firms with high residual State Ownership exhibit lower performance, valuation, efficiency, and risk-taking in collectivist societies. Our results suggest that formal institutions are not, as sustained by previous studies, the main/exclusive constraints on the privatization reform.
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the political economy of residual State Ownership in privatized firms evidence from emerging markets
Journal of Corporate Finance, 2011Co-Authors: Narjess Boubakri, Omrane Guedhami, Jeanclaude Cosset, Walid SaffarAbstract:Abstract We investigate the political determinants of residual State Ownership for a unique database of 221 privatized firms operating in 27 emerging countries over the 1980 to 2001 period. After controlling for firm-level and other country-level characteristics, we find that the political institutions in place, namely, the political system and political constraints, are important determinants of residual State Ownership in newly privatized firms. Unlike previous evidence that political ideology is an important determinant of privatization policies in developed countries, we find that right- or left-oriented governments do not behave differently in developing countries. These results confirm that privatization is politically constrained by dynamics that differ between countries.
Omrane Guedhami - One of the best experts on this subject based on the ideXlab platform.
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State Ownership and debt structure
Review of Corporate Finance, 2021Co-Authors: Narjess Boubakri, Ruiyuan Chen, Sadok El Ghoul, Omrane GuedhamiAbstract:We provide the first firm-level evidence of the relation between State Ownership and debt structure. Using an international sample of newly privatized firms (NPFs) from 76 countries over the 1998–2017 period, we find that State Ownership is associated with a more diversified debt structure. This evidence is more pronounced for higher levels of State control, and is robust to accounting for endogeneity, using alternative samples, and controlling for other owner types. Additional analysis shows that our main evidence is consistent with the soft budget constraint, political, and social views of State Ownership. Our results have several policy implications for financial system stability and the efficient allocation of financial resources in the economy.
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international evidence on State Ownership and trade credit opportunities and motivations
Journal of International Business Studies, 2021Co-Authors: Ruiyuan Chen, Sadok El Ghoul, Omrane Guedhami, Chuck C Y Kwok, Robert C NashAbstract:Recent events, most notably the Global Financial Crisis and the COVID-19 pandemic, have made it increasingly apparent that liquidity is synonymous with corporate survival. In this paper, we explore how governments can fulfill an important need as suppliers of liquidity. Building on the financing advantage view of State Ownership, we theorize how State-owned enterprises (SOEs) may provide capital by offering trade credit to customer firms. The data indicate a positive relation between the level of State Ownership and the provision of trade credit. Using an institution-focused framework, we further determine that the nation's institutional environment systematically affects the opportunities and motivations for SOEs to grant trade credit. Specifically, we find that SOEs grant more trade credit in countries with less developed financial markets, weaker legal protection of creditors, less comprehensive information-sharing mechanisms, more collectivist societies, left-wing governments, and higher levels of unemployment. Firm-level factors also influence the credit-granting decisions of SOEs, with SOEs with lower levels of State Ownership and higher extents of internationalization offering lower amounts of trade credit. Overall, our study offers novel insights regarding the important role of State-owned firms as providers of liquidity.
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State Ownership and stock liquidity evidence from privatization
Journal of Corporate Finance, 2020Co-Authors: Narjess Boubakri, Ruiyuan Chen, Sadok El Ghoul, Omrane Guedhami, Robert C NashAbstract:Abstract We provide unique firm-level evidence of the relation between State Ownership and stock liquidity. Using a broad sample of newly privatized firms (NPFs) from 53 countries over the period 1994–2014, our study identifies a non-monotonic association between State Ownership and stock liquidity. The inverse U-shaped relation is consistent with trade-offs between costs and benefits of State Ownership and suggests an optimal level of government shareholdings that maximizes stock liquidity of NPFs. We further identify that the inflection point from the cost/benefit trade-off is contingent upon characteristics of the nation's institutional environment.
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post privatization State Ownership and bank risk taking cross country evidence
Journal of Corporate Finance, 2020Co-Authors: Narjess Boubakri, Sadok El Ghoul, Omrane Guedhami, Mahmud HossainAbstract:Abstract We examine the relation between State residual Ownership and bank risk-taking for privatized banks from 45 countries. Applying propensity score matching, we find that privatized banks tend to exhibit higher levels of risk-taking post-privatization than their publicly listed non-privatized counterparts. Moreover, partially privatized banks exhibit higher levels of risk-taking than fully privatized banks. We also observe a positive and significant relation between the level of residual State Ownership and risk-taking. These findings are consistent with the distorted objectives associated with government control, as suggested by the political benefits of control, and with the soft budget constraint views of State Ownership. The distortion can be mitigated by the quality of a country's institutional and regulatory environments. Finally, our results show that the effect of State Ownership on risk-taking is more pronounced in countries with a higher dominance of State-owned enterprises, and it was more prevalent during the global financial crisis.
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State Ownership and corporate cash holdings
Journal of Financial and Quantitative Analysis, 2018Co-Authors: Ruiyuan Chen, Sadok El Ghoul, Omrane Guedhami, Robert C NashAbstract:Using a unique sample of newly privatized firms from 59 countries, this article provides new evidence about the agency costs of State Ownership and new insight into the corporate governance role of country-level institutions. Consistent with agency theory, we find strong and robust evidence that State Ownership is positively related to corporate cash holdings. Moreover, we find that the strength of country-level institutions affects the relation between State Ownership and the value of cash holdings. In particular, as State Ownership increases, markets discount the value of cash holdings more in countries with weaker institutions.
Edward Lee - One of the best experts on this subject based on the ideXlab platform.
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the impact of State Ownership on share price informativeness the case of the split share structure reform in china
British Accounting Review, 2012Co-Authors: Wenxuan Hou, Jingming Kuo, Edward LeeAbstract:This study examines the impact of State Ownership on share price informativeness using the unique setting of the Split Share Structure Reform in China. This reform abolishes the trading restriction on shares held mainly by State shareholders. In doing so, it renders State shareholders' wealth more sensitive to share price movements and decreases their conflict of interests with private shareholders. This change is expected to strengthen the corporate governance incentives of State shareholders and reduce the information asymmetry in Chinese listed firms. This prediction is confirmed through empirical evidence of increased share price informativeness among firms that are more sensitive to the impact of this reform, i.e. those with more State Ownership or restricted shares. These findings imply that this reform benefits the information environment and minority shareholders in the Chinese stock market.
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the impact of State Ownership on share price informativeness the case of the split share structure reform in china
2011Co-Authors: Wenxuan Hou, Jingming Kuo, Edward LeeAbstract:We examine the impact of State Ownership on share price informativeness by using the unique setting of the Split Share Structure Reform in China. This reform abolishes the trading restriction of shares held mainly by State shareholders, which in turn renders their wealth more sensitive to share price movement and decreases their conflict of interest with private shareholders. We expect this change to strengthen the corporate governance incentives of State shareholders and reduce the information asymmetry of Chinese listed firms. We confirm this prediction through empirical evidence of increased share price informativeness among firms that are more sensitive to the impact of this reform, i.e. those with more State Ownership or restricted shares. Our finding implies that this reform benefits the information environment and minority shareholders of the Chinese stock market.
Walid Saffar - One of the best experts on this subject based on the ideXlab platform.
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national culture and privatization the relationship between collectivism and residual State Ownership
Journal of International Business Studies, 2016Co-Authors: Narjess Boubakri, Omrane Guedhami, Chuck C Y Kwok, Walid SaffarAbstract:Using a large hand-collected database of 605 privatized firms from 48 countries, we examine the relationship between the collectivism measure of culture and residual State Ownership in privatized firms. We find that the continued role of government in privatized firms is positively related to collectivism. This result is robust to using alternative measures of collectivism and government control, as well as when we address the endogeneity of collectivism. Finally, we examine the economic outcomes of culture at the firm level, focusing primarily on performance, efficiency, risk-taking, and valuation measures. We report that privatized firms with high residual State Ownership exhibit lower performance, valuation, efficiency, and risk-taking in collectivist societies. Our results suggest that formal institutions are not, as sustained by previous studies, the main/exclusive constraints on the privatization reform.
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the political economy of residual State Ownership in privatized firms evidence from emerging markets
Journal of Corporate Finance, 2011Co-Authors: Narjess Boubakri, Omrane Guedhami, Jeanclaude Cosset, Walid SaffarAbstract:Abstract We investigate the political determinants of residual State Ownership for a unique database of 221 privatized firms operating in 27 emerging countries over the 1980 to 2001 period. After controlling for firm-level and other country-level characteristics, we find that the political institutions in place, namely, the political system and political constraints, are important determinants of residual State Ownership in newly privatized firms. Unlike previous evidence that political ideology is an important determinant of privatization policies in developed countries, we find that right- or left-oriented governments do not behave differently in developing countries. These results confirm that privatization is politically constrained by dynamics that differ between countries.
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the political economy of residual State Ownership in privatized firms evidence from emerging markets
Social Science Research Network, 2009Co-Authors: Omrane Guedhami, Narjess Boubakri, Jeanclaude Cosset, Walid SaffarAbstract:To investigate the control structure of newly privatized firms, we use a unique database of 221 privatized firms operating in 27 emerging countries over the 1980-2001 period. Specifically, we examine the determinants of residual State Ownership after privatization over a window of up to six years after divestiture. We find that the residual State Ownership is largely influenced by the size of the firm, the level of investor protection and the extent of corruption in the country. Controlling for the political institutions in place shows that government tenure (stability), the political system and political cohesion are important determinants of the residual State Ownership in newly privatized firms. This result confirms that privatization is politically shaped and constrained by a dynamic that will differ between countries.
