A corporate governance explanation of the A-B share discount in China
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
Author(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 125-147 |
| Journal / Publication | Journal of International Money and Finance |
| Volume | 31 |
| Issue number | 2 |
| Publication status | Published - Mar 2012 |
| Externally published | Yes |
Link(s)
Abstract
B-shares listed in China are traded at substantial discounts to their corresponding A-shares although they have identical rights. We offer a governance explanation and suggest that relative to domestic investors, foreign investors care more about a firm's governance quality. Results are supportive, as the B-share price discount is higher for firms that have weaker governance characterized by 1) higher ownership concentration, 2) ineffective boards with a higher proportion of directors appointed by the parent company, 3) lower dividend payouts, and 4) higher levels of information asymmetry. © 2011 Elsevier Ltd.
Research Area(s)
- A-B Share discount, Corporate governance, Investor base, Valuation
Citation Format(s)
A corporate governance explanation of the A-B share discount in China. / Tong, Wilson H.S.; Yu, Wayne W.
In: Journal of International Money and Finance, Vol. 31, No. 2, 03.2012, p. 125-147.
In: Journal of International Money and Finance, Vol. 31, No. 2, 03.2012, p. 125-147.
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
