How Do Various Forms of Ownership Impact Firm Performance?

Abstract

Corporate governance and ownership structures are key factors affecting companies' management, operations and innovation. This study aims to provide a better understanding of the interaction between ownership forms and firm performance by addressing the key research question: How do various types of ownership forms impact on governance efficiency and firm value? We propose to address this issue by taking the mandatorily reported shareholders' ownership characteristic to determine each ownership form and to empirically test the governance role and the impact of ownership form on firms' value. The results show that there is a high concentra-tion of state ownership among the listed companies. In terms of market performance, it is shown that companies directly controlled by the state ownership generally perform worse than companies controlled by other ownership forms, namely legal person shares, state-owned legal persons shares, and tradable shares. Based on separate forms of ownerships, our investigation has found a significant negative relationship between ownership concentration and firm valuation.