Ownership structure as corporate governance mechanism: Evidence from Chinese listed companies

This paper examines the cross-sectional relation between ownership structur e and corporate performance of a sample of 434 manufacturing firms listed o n the Chinese stock exchange. Following the agency theory and taking other influential factors into account, such as firm size, leverage ratio, varian ce of sales, growth of sale and firm age, the results suggest that there is a strong relation between ownership concentration and corporate performanc e, measured by Tobin's Q. A further classification of owners reveals that w hile shares held by state play a negative role in corporate governance, dom estic institutional and managerial shareholdings improve the firms' perform ance.