scholarly journals The success of China’s non-tradable share reform

2014 ◽  
Vol 11 (4) ◽  
pp. 355-369 ◽  
Author(s):  
Jing Chi ◽  
Jing Liao ◽  
Fengjiao Li
Keyword(s):  
Operating Performance ◽  
State Ownership ◽  
Operating Efficiency ◽  
Total Employment ◽  
Listed Firms ◽  
Net Profit ◽  
Firm Profitability ◽  
Return On Sales ◽  
The Impact ◽  
Positive Effect

This paper examines the impact of the Non-tradable Share (NTS) Reform on the financial and operating performance of China’s listed firms, using a sample of 563 state-owned enterprises (SOEs) that were partially-privatized through share issue privatizations (SIPs) from 1994 to 1998 and then carried out the NTS reform from 2005 to 2008. We find that the NTS reform has greatly improved firm profitability (measured by real net profit, real EBIT, return on sales and EBIT to sales), output (measured by real sales), operating efficiency (measured by real sales, real net profit and real EBIT per employee) and employment (measured by total employment). The positive effect of the NTS reform on firm operating performance is much stronger than that of the first round SIPs. The regression results show that the decrease of state ownership control is a significant determinant of the increase of firm profitability after the NTS reform.

scholarly journals Does the Impact of State Ownership on Financial Performance of Firms Vary across different Sectors in China?

2019 ◽  
Vol IV (III) ◽  
pp. 24-32
Author(s):  
Muhammad Yusuf Amin
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Least Square Method ◽  
State Ownership ◽  
Least Square ◽  
Annual Data ◽  
Listed Firms ◽  
Ordinary Least Square ◽  
Firm Profitability ◽  
The Impact

This study explores the impact of state ownership on the performance of Chinese listed firms. This study uses annual data of 143, state-owned 1,235, private enterprises for a period of 2011 to 2015. We use Ordinary Least Square method to find whether firm profitability and ownership are associated with each other or not. The results of whole sample indicate that over all firm performance and state ownership are negatively associated in China. However, the negative connection between state ownership and financial performance changes as we run the regression across different sectors.

scholarly journals The Impact of Working Capital Management on Firm Profitability: Empirical Evidence from the Polish Listed Firms

2020 ◽  
Vol 14 (1) ◽  
pp. 9
Author(s):  
Sorin Anton ◽  
Anca Afloarei Nucu
Keyword(s):  
Empirical Evidence ◽  
Ordinary Least Squares ◽  
Optimum Level ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Listed Firms ◽  
Firm Profitability ◽  
Break Even Point ◽  
The Impact

The purpose of this study is to investigate the relationship between working capital and firm profitability for a sample of 719 Polish listed firms over the period of 2007–2016. The scarcity of empirical evidence for emerging economies and the importance of working capital efficiency motivate the research on the working capital–financial performance relationship. The paper adopts a quantitative approach using different panel data techniques (ordinary least squares, fixed effects, and panel-corrected standard errors models). The empirical results report an inverted U-shape relationship between working capital level and firm profitability, meaning that working capital has a positive effect on the profitability of Polish firms to a break-even point (optimum level). After the break-even point, working capital starts to negatively affect firm profitability. The study brings theoretical and practical contributions. It extends and complements the literature on the field by highlighting new evidence on the non-linear interrelation between working capital management (WCM) and corporate performance in Poland. From the practitioners’ perspective, the results highlight the importance of WCM for firm profitability.

scholarly journals Product Line Diversification and Its Impact on Firm Performance

2021 ◽  
Vol 5 (3) ◽  
pp. 43-58
Author(s):  
Zia ur Rehman ◽  
Asad Khan ◽  
Rafique Ahmed Khuhro ◽  
Abdul Ghafoor Khan
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Product Line ◽  
Group Affiliation ◽  
Firm Profitability ◽  
Business Line ◽  
Diversified Firms ◽  
The Impact ◽  
Positive Effect ◽  
Better Than

The objective of the study is to measure product diversification’s impact on insurance firm’s financial performance in Pakistan. Analysis are carried out to examine how ownership structure, capitalization, group membership, firm size, diversification across business lines, industry concentration affects firm’s financial performance. Data from 2009-2019 is collected to measure the impact of diversification (entropy) on the risk- adjusted returns. Findings of the study reveal that business line diversification has strong positive effect on firm performance (for both ROA and ROE) which means that diversified firms perform better than non-diversified firms. For managers these findings are useful as they propose the need for diversification, capitalization, increase in size and group affiliation to enhance firm profitability.

The Impact of Ownership on Corporate Performance: The Case of the UAE

2018 ◽  
Vol 13 (3) ◽  
Author(s):  
Magda Elsayed Kandil ◽  
Minko Markovski
Keyword(s):  
Corporate Performance ◽  
Positive Impact ◽  
Listed Companies ◽  
State Ownership ◽  
Control Measures ◽  
Government Ownership ◽  
Strong Trend ◽  
Two Samples ◽  
The Impact ◽  
Positive Effect

AbstractThis study attempts to identify whether government ownership has an effect on corporate performance, such as Return on Assets (ROA), Price to Book value, and Profits for a sample of 102 listed companies on the UAE stock exchanges and a subsample of 17 banks listed on the same bourses over a period of 31 quarters. In the case of the sample of 102 companies, government ownership has a positive impact on some of the corporate performance indicators, as well in the banking subsample. In addition, the analysis evaluates the impact of state ownership on debt accumulated across the two samples. The results indicate that state ownership reduced the need to accumulate debt in general across the larger sample. However, focusing on banks, state ownership facilitates borrowing and accumulating debt. The results point to the positive effect of state ownership on corporate performance. Further, state ownership eases constraints on banks’ borrowing as it boosts confidence in the outlook, facilitating higher ratings and cheaper sources of funding. In the case of the UAE, similar to some other countries, where there is a strong trend toward government ownership in listed companies and banks, it has a positive effect on their performance for the period 2008–2016, i. e., there is a positive relationship between the block-holder ownership and firms’ performance, subject to efficiency control measures.

scholarly journals Complex state ownership, competition, and firm performance – Russian evidence

2019 ◽  
Vol 15 (2) ◽  
pp. 189-221
Author(s):  
Eva Liljeblom ◽  
Benjamin Maury ◽  
Alexander Hörhammer
Keyword(s):  
State Ownership ◽  
State Control ◽  
Government Control ◽  
Content Type ◽  
Listed Firms ◽  
Market Index ◽  
Performance Effects ◽  
Golden Shares ◽  
Sales Employees ◽  
The Impact

Purpose State ownership has been common especially in industries with restricted competition. In Russia, state-controlled firms represent around 41 percent of the market value of all listed firms (Deloitte, 2015). Yet, there is a significant gap in the literature regarding the effects of various forms of government control in listed firms. The purpose of this paper is to fill this gap by exploring the impact of the complexity of state ownership and competition on the performance of Russian listed firms. Design/methodology/approach The sample consists of data for 72 firms (360 firm-years) in the Russian MOEX broad market index during 2011–2015. The complexity of state ownership is captured by studying forms of state control including majority/minority, direct/indirect, federal/regional, mixed structures and golden shares. Findings The authors find significant differences in performance relating to different forms of state ownership. State control is negatively related to firm valuation and the sales/employees ratio. Performance is weakest when state ownership takes the form minority, regional or direct ownership. State control through golden shares typically outperforms other state-controlled firms. The authors find indications of employment prioritization beyond the economical optimum. In addition, the relation between state ownership and profitability becomes positive in sectors where state firms appear to enjoy lower competition. Originality/value While the effects of state ownership have been studied on many markets, there is a lack of studies on the effects of different forms, or the complexity, of state ownership beyond direct and indirect ownership. The authors contribute to the literature on the performance effects of state ownership by studying a multitude of forms of governmental ownership as well as the role of competition in Russia. Especially the profitability of state-controlled firms is significantly affected by industry characteristics. Implications of the results are discussed both from firm and policy maker perspectives.

scholarly journals Impact of Capital Structure on Profitability:An empirical analysis of listed firms in India

2018 ◽  
Vol 7 (2) ◽  
pp. 1-6
Author(s):  
Atif Ghayas ◽  
Javaid Akhter
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Short Term ◽  
Return On Equity ◽  
Listed Firms ◽  
Relationship Capital ◽  
The Impact ◽  
The Relationship ◽  
Positive Effect

This study aims to empirically examine and analyze the impact of capital structure decision on the firm’s profitability by using a sample of 35 Indian pharmaceutical companies listed on Bombay Stock Exchange (BSE) during the period of 5 years from 2012 to 2016. Regression Analysis is used to measure the extent and nature of the relationship. Capital structure variables used in the study are ratio of long-term debt to total assets (LDA), ratio of short-term debt to total assets (SDA) and ratio of Total debt to total assets (DA) while profitability has been measure by Return on Equity (ROE). Firms Size (SIZE)and Salesgrowth(GROW) are also used as control variables. Results reveal a positive effect of SDA and DA on ROE, while a weak-to-no effect was found of LDA on ROE.

scholarly journals The impact of equitization on financial and operating performance of state-owned enterprises (SOEs) in Vietnam: An approach using propensity score matching

2020 ◽  
Vol 4 (2) ◽  
pp. First
Author(s):  
Nguyen Van Tan
Keyword(s):  
Large Scale ◽  
Operating Performance ◽  
Comparison Method ◽  
Average Treatment Effect ◽  
Operating Efficiency ◽  
Investment Strategies ◽  
Industry Group ◽  
Using Data ◽  
The Impact

This paper examines the impact of equitization on financial and operating performance of state-owned enterprises (SOEs) in Vietnam. Previous related privatization theories have not explained whether there is an improvement in financial and operating performance of equitized SOEs compared to non-equitized SOEs or not. This study proposes to use with-without comparison method through the average treatment effect measuring the impact of equitization on financial and operating performance of SOEs. By using data of 114 SOEs equitized in the period from 2012 to 2014, the author finds that equitized SOEs can not improve profitability, operating efficiency, and output when considering non-equitized SOEs. There is also no evidence for a reduction in the number of employees of equitized SOEs after equitization. These findings are in contrast to previous studies in Vietnam, but there are similarities with the results of studies in China. This is because equitized SOEs in the early post-equitization period in Vietnam are still monitored by the Vietnamese government, as well as the equitized enterprises in the period 2012-2014 are mainly large-scale ones with slow change of operating objectives, monitoring mechanism and weak competitiveness after equitization. However, equitization can help equitized SOEs operate more efficiently than non–equitized SOEs when considering non-listing status or industry group. This research provides implications for the Vietnamese government to encourage non-equitized enterprises to participate in the equitization program actively. The research results also help investors to have appropriate long-term investment strategies in equitized SOEs. This paper also has some limitations for further research.

scholarly journals The Effects of Corporate Bonds on Employment: Early Evidence from Greece

2020 ◽  
Vol 12 (2) ◽  
pp. 235-253
Author(s):  
Sotirios Karagiannis ◽  
Dimitrios Thomakos
Keyword(s):  
Corporate Bonds ◽  
Banking System ◽  
External Financing ◽  
Listed Firms ◽  
Negative Effect ◽  
The Impact ◽  
First Time ◽  
Investment Choices ◽  
Positive Effect

This study investigates the impact of corporate bonds issued by Greek listed firms on employment. Even though external financing and the effects on employment has been studied in the literature, we extend the existing literature by focusing for the first time on the specific role of corporate bonds on employment. We have collected all the relevant papers on this line of the literature and concisely report them in a table format and then use them in analyzing our results. Our empirical analysis is based on a panel dataset from 2001 to 2014 and we examine the effect of corporate bonds in the pre and post period of the Greek economic crisis, in which the banking system is vulnerable and unable to provide financing to the firms. The results suggest that corporate bonds have a positive effect on employment in the pre-crisis sample, denoting that firms hire employees and proceed to investment choices. On the contrary, during the recession, corporate bonds have a negative effect on employment. Firms reduce their costs and try to control their debt obligations by issuing corporate bonds.

Dynamic study of corporate governance structure and firm performance in China

2019 ◽  
Vol 13 (2) ◽  
pp. 299-317 ◽  
Author(s):  
Lin Shao
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Supervisory Board ◽  
Governance Structure ◽  
State Ownership ◽  
Content Type ◽  
Listed Firms ◽  
The Impact ◽  
The Relationship

Purpose The paper aims to provide a comprehensive investigation of the relationship between corporate governance (CG) structure and firm performance in Chinese listed firms from 2001 to 2015. The authors’ motivation derives from the fact that the CG system in China is different from those in the US, the UK, Germany, Japan and other countries. Design/methodology/approach A large unbalanced sample, covering more than 22,700 observations in Chinese listed firms, was used to explore, by means of a system-generalized method-of-moments (GMM) estimator, the relationship between CG structure and firm performance to remove potential sources of endogeneity. Findings Results show that Chinese CG structure is endogenously determined by the CG mechanisms investigated: there is no relationship between board size (including independent directors) and firm performance; CEO duality has a significantly negative effect on firm performance; concentration of ownership has a significantly positive influence on firm performance; managerial ownership is negatively correlated with firm performance; state ownership has a significantly positive effect on firm performance; and a supervisory board is positively correlated with firm performance. Practical implications The findings provide policymakers and firm managers with useful empirical guidance concerning CG in China. Originality/value Few integrative studies have examined the impact of CG structure on firm performance in China. This study adds new empirical evidence that the relation between CG structure and performance in China is endogenous and dynamic when controlling for unobserved heterogeneity, simultaneity, and dynamic endogeneity.

scholarly journals The Impact of Leverage on Firm Growth. Empirical Evidence from Romanian Listed Firms

2016 ◽  
Vol 9 (2) ◽  
pp. 147-158 ◽  
Author(s):  
Sorin Gabriel Anton
Keyword(s):  
Fixed Effects ◽  
Firm Growth ◽  
Employment Growth ◽  
Sales Growth ◽  
Economic Uncertainty ◽  
Listed Firms ◽  
Alternative Measures ◽  
Fixed Effects Regression ◽  
The Impact ◽  
Positive Effect

AbstractThe aim of the paper is to assess the impact of leverage on firm growth in periods of economic growth and economic uncertainty. We employ a sample of Romanian listed firms over the period 2001-2011 and several alternative measures for firm growth (i.e. sales growth, assets growth, and employment growth). The results of fixed effects regression model show that the leverage has a positive effect on firm growth. Furthermore, profitability was found to positively influence the firm growth, while older firms saw a faster increase in assets and sales. Within this particular sample, firm size appears to constrain growth.

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