Does stock liquidity affect expropriation behavior by controlling shareholders? Evidence from China

IF 2.8 2区经济学 Q1 ECONOMICS

Economic Systems Pub Date : 2024-06-01 DOI:10.1016/j.ecosys.2024.101217

Xin Xiang

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引用次数: 0

Abstract

When a firm is controlled by a large shareholder, the principal agency problem arises from expropriation by controlling shareholders of other shareholders. Using a sample of 3776 publicly traded firms in the Chinese A-share market over the period 2007–2020, this study investigates whether stock liquidity impedes or enhances the expropriation behavior of controlling shareholders. I demonstrate that (1) a liquid stock market generally encourages expropriation behavior by controlling shareholders, (2) the positive effect of stock liquidity on expropriation by controlling shareholders is mitigated when active investors hold a large stake in the firm, and (3) active investors’ monitoring of expropriation by controlling shareholders is mitigated at state-owned enterprises and firms that have a large gap between ownership and control. However, higher competition among blockholders strengthens the discipline of active investors with respect to expropriation. This study builds a new link between a market factor (stock liquidity) and a governance problem (expropriation by controlling shareholders) and reveals some new characteristics in the relationship between stock liquidity and corporate governance in an emerging market.

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股票流动性会影响控股股东的征用行为吗？来自中国的证据

当公司由大股东控制时，主要代理问题来自控股股东对其他股东的征用。本研究以 2007-2020 年间中国 A 股市场 3776 家上市公司为样本，探讨了股票流动性是阻碍还是促进控股股东的侵占行为。我的研究表明：（1）股票市场的流动性通常会鼓励控股股东的侵占行为；（2）当积极投资者持有公司大量股权时，股票流动性对控股股东侵占行为的积极影响会减弱；（3）在国有企业和所有权与控制权差距较大的公司，积极投资者对控股股东侵占行为的监督会减弱。然而，大股东之间的竞争加剧会加强积极投资者对征用行为的约束。本研究在市场因素（股票流动性）与治理问题（控股股东征用）之间建立了新的联系，并揭示了新兴市场中股票流动性与公司治理之间关系的一些新特征。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Economic Systems ECONOMICS-

CiteScore

4.90

自引率

0.00%

发文量

审稿时长

48 days

期刊介绍： Economic Systems is a refereed journal for the analysis of causes and consequences of the significant institutional variety prevailing among developed, developing, and emerging economies, as well as attempts at and proposals for their reform. The journal is open to micro and macro contributions, theoretical as well as empirical, the latter to analyze related topics against the background of country or region-specific experiences. In this respect, Economic Systems retains its long standing interest in the emerging economies of Central and Eastern Europe and other former transition economies, but also encourages contributions that cover any part of the world, including Asia, Latin America, the Middle East, or Africa.