{"title":"The bright side of cross ownership: Evidence from the corporate resilience to COVID-19 crisis in China","authors":"Yihui Chen, Xin He, Haoyuan Wei","doi":"10.1111/irfi.12468","DOIUrl":null,"url":null,"abstract":"<p>We investigate the impact of cross ownership on corporate resilience around the COVID-19 pandemic in the Chinese financial market. We show that firms with greater cross ownership experience higher corporate resilience, evidenced by a milder reduction in revenue during the COVID-19 pandemic and a faster recovery in revenue afterwards. This effect is more pronounced for firms in high-tech industries and large firms, firms in regions severely hit by the pandemic, and regions with better commercial credit environments. We argue that cross ownership improves the financing resources, corporate governance, and information acquisition, which enhances corporate resilience in the presence of the pandemic. Consistent with this notion, we find that firms with greater cross ownership have higher financing flexibility, fewer agency problems, and less information asymmetry during the COVID-19 pandemic.</p>","PeriodicalId":46664,"journal":{"name":"International Review of Finance","volume":"25 1","pages":""},"PeriodicalIF":2.6000,"publicationDate":"2024-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Finance","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/irfi.12468","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
We investigate the impact of cross ownership on corporate resilience around the COVID-19 pandemic in the Chinese financial market. We show that firms with greater cross ownership experience higher corporate resilience, evidenced by a milder reduction in revenue during the COVID-19 pandemic and a faster recovery in revenue afterwards. This effect is more pronounced for firms in high-tech industries and large firms, firms in regions severely hit by the pandemic, and regions with better commercial credit environments. We argue that cross ownership improves the financing resources, corporate governance, and information acquisition, which enhances corporate resilience in the presence of the pandemic. Consistent with this notion, we find that firms with greater cross ownership have higher financing flexibility, fewer agency problems, and less information asymmetry during the COVID-19 pandemic.
期刊介绍：
The International Review of Finance (IRF) publishes high-quality research on all aspects of financial economics, including traditional areas such as asset pricing, corporate finance, market microstructure, financial intermediation and regulation, financial econometrics, financial engineering and risk management, as well as new areas such as markets and institutions of emerging market economies, especially those in the Asia-Pacific region. In addition, the Letters Section in IRF is a premium outlet of letter-length research in all fields of finance. The length of the articles in the Letters Section is limited to a maximum of eight journal pages.
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