Publication Details

Wang, X., Cao, J., Liu, Q., Tang, J. & Tian, G. Gang. (2015). Disproportionate ownership structure and IPO long-run performance of non-SOEs in China. China Economic Review (Amsterdam), 32 27-42.


This paper examines the relationship between ownership structures and IPO long-run performance of non-SOEs in China. Although non-SOEs underperform the market in general after IPO but the poor performance is mainly caused by the IPOs with ownership control wedge. Non-SOEs with one share one vote structure outperform those with control-ownership wedge by 30% for three years post-IPO performance in adjusted buy-and-hold returns. Non-SOEs with control-ownership wedge have higher frequency of undertaking value-destroying related party transactions. These findings suggest that non-SOEs need to improve corporate governance such as disproportionate ownership structure to better safeguard the interest of long-run shareholders.

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