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Do Corporate Governance Adjustments during a Market Crisis Affect Firms Value?

Do Corporate Governance Adjustments during a Market Crisis Affect Firms Value?

Gao, Xiaowen (2017) Do Corporate Governance Adjustments during a Market Crisis Affect Firms Value? [Working Paper] (Unpublished)

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Abstract

This paper investigates the relationship between adjustments in ownership structure and changes in firm value during the Chinese market crash of June 2015. First, we examine whether Chinese SOEs are more actively making adjustments in their governance structure than non-SOEs to adapt to sudden external environment changes. Second, we examine the effect of changes in governance structure on changes in Tobin’s Q by focusing on the effectiveness of such adjustment provided during a crash to restore investors’ confidence. Using a sample of 960 non-financial listed companies from Shanghai and Shenzhen Stock Exchanges, we expect to find that SOEs are more actively engaged with making adjustments for political interests. We also expect to find that amongst all companies that have made adjustments, SOEs experience smaller firm value reduction than non-SOEs.

Item Type: Working Paper
Uncontrolled Keywords: Corporate governance, Financial crisis, State-owned Enterprises
Last Modified: 19 May 2017 15:30
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/16993

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