FACULTY OF COMMERCE
2011
Ownership structure and firm financial policies is a core research area in the Centre and a very hot issue at the moment. “This paper examines the effect of state control and ownership structure on leverage decision of firms listed in Chinese stock market,” said Associate Professor Tian. “Our results show that state owned enterprises (SOEs) have higher leverage ratios than nonSOEs, and SOEs in regions with a poorer institutional environment have higher leverage ratios than SOEs in better regions. We also show that the largest shareholding (percentage of shares held by the large shareholder) in the SOEs has a negative relationship with the leverage ratio, while largest shareholding in NonSOEs has a nonlinear relationship with shortterm and longterm debt ratio,” said Associate Professor Tian.
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