The Impact of Ownership Structure and Capital Structure on Firm Performance: Evidence from China GEM

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Wang, Huixin (2020) The Impact of Ownership Structure and Capital Structure on Firm Performance: Evidence from China GEM. [Dissertation (University of Nottingham only)]

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Abstract

Purpose: This study researches the relationship between ownership structure, capital structure and corporate performance of the companies listed on the China Growth Enterprise Market (GEM).

Methodology: This study collects the panel data for 490 companies from 2016 to 2019. I use the fixed effects regression model to analyse the data. In addition,this research chooses ROA, the largest shareholder's shareholding ratio, the top five largest shareholder's shareholding ratio, management shareholding, leverage, short-term debt ratio, and long-term debt ratio as variables.

Results: Empirical analysis presents that there is a significant positive correlation between the fraction of shares held by largest shareholder and firm performance. In addition, the top 5 shareholders also has a positive effective on firm performance. However, the relationship between managerial ownership and firm performance is not significant. In term of capital structure, leverage has negative relationship with firm value, but short term debt rate are positive with company performanc. What is more, the relationship between long term debt and firm performance is not significant.

Conclusion:Increasing equity concentration and reducing debt level to a certain extent are beneficial for companies listed on the China GEM. Shareholders should adopt appropriate incentive measures and monitoring mechanism to reduce agency cost and strengthen the alliance effect between management and shareholders. Companies should make reasonable use of debt financing to optimize their own capital structure.

Item Type: Dissertation (University of Nottingham only)
Depositing User: Wang, Huixin
Date Deposited: 13 Apr 2023 12:01
Last Modified: 13 Apr 2023 12:01
URI: https://eprints.nottingham.ac.uk/id/eprint/62372

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