Recent events in China provide a historical opportunity to study the expropriation of minority shareholders. In this paper, we document the use of inter-corporate loans by controlling shareholders to extract funds from Chinese listed firms. Using accounting information from public sources, we show how tens of billions of RMB were siphoned from hundreds of companies during the 1996 to 2006 period. Specifically, we show the nature and extent of these abuses, evaluate their economic consequences, explore their cross-sectional determinants, and report on the extensive efforts by auditors and regulators that eventually contained this practice. Collectively, our findings shed light on the nature and severity of the tunneling problem in China, and the on-going challenges associated with regulatory reform in the country.

This paper investigates the market response to reform of the Chinese split (A-)share structure using a sample of companies included in the China Securities Index 300. We find the three-day cumulative abnormal returns (CAR) to be negative and significant around government announcement of the reform on 29 April 2005, but not significant around individual companies’ decision to implement the reform. We attribute this change in market sentiment to the release of information during company announcement that the reform will feature some type of consideration to existing shareholders of tradable A-shares. Our results also show that existing holders of tradable A-shares require higher returns when companies pay in warrants or combination methods. However, we find no relation between the level of consideration and CAR suggesting that investors perceive the consideration to be adequate based on the company’s financial and operating conditions at the time of the reform.

An unparalleled feature ownership structures in China is the presence of non tradable shares (NTS). NTS represented a major hurdle to domestic financial market development for its negative effects on liquidity and market transparency. After some failed attempts, in 2005 the Chinese authorities have launched a structural reform program aiming at eliminating NTS. In this paper, we evaluate the stock price effects of the actual implementation of this reform in 368 firms. The NTS reform generated a statistically significant 8 percent positive abnormal return over the event window, adjusting prices for the compensation requested by tradable shareholders. Results are consistent with the expectation of improved economic fundamentals such as better corporate governance and enhanced liquidity.

In 2005 and 2006, the split-share structure reform converted the nontradable shares of most domestic public firms in China to tradable shares. This conversion imparted a drastic supply shock to the public market. Studying this unique event, we provide direct evidence to support an inelastic demand curve for stocks. Abnormal returns of the sample firms resulting from the reform are found to be negatively associated with the size of the supply shock. This finding is free from the confounding information effects present in many prior studies of stock price elasticity. It is also robust after controlling for opposite price impacts of ROA, firm size, and ownership concentration.

A fundamental question in economics and finance is whether and how removing barriers is associated with efficiency gains. We study this question using share issue privatization in China that took place through the split share structure reform as our experimental setting. Prior to the reform, domestic Ashares are divided into tradable and non-tradable shares with identical cash flow and voting rights. Under the reform, non-tradable share holders negotiate a compensation plan with tradable share holders in order to make their shares tradable. We develop a general equilibrium model to help understand the determinants of compensation and the source of gains in the process of privatization. Our key predictions are: a) there is compensation made by the non-tradable share holders to the tradable share holders if and only if the bargaining power of the former is weaker than the bargaining power of the latter; and b) the size of the compensation is decreasing in firm performance. Our second prediction contradicts conventional wisdom that fails to account for improved risk sharing after the reform. Our empirical results are broadly consistent with our model’s predictions. We conclude that better risk sharing is an important consideration in China’s share issue privatization.

This paper investigates the market response to reform of the Chinese split (A-)share structure using a sample of companies included in the China Securities Index 300. We find the three-day cumulative abnormal returns (CAR) to be negative and significant around government announcement of the reform on 29 April 2005, but not significant around individual companies’ decision to implement the reform. We attribute this change in market sentiment to the release of information during company announcement that the reform will feature some type of consideration to existing shareholders of tradable A-shares. Our results also show that existing holders of tradable A-shares require higher returns when companies pay in warrants or combination methods. However, we find no relation between the level of consideration and CAR suggesting that investors perceive the consideration to be adequate based on the company’s financial and operating conditions at the time of the reform.

This paper investigates the market response to reform of the Chinese split (A-)share structure using a sample of companies included in the China Securities Index 300. We find the three-day cumulative abnormal returns (CAR) to be negative and significant around government announcement of the reform on 29 April 2005, but not significant around individual companies’ decision to implement the reform. We attribute this change in market sentiment to the release of information during company announcement that the reform will feature some type of consideration to existing shareholders of tradable A-shares. Our results also show that existing holders of tradable A-shares require higher returns when companies pay in warrants or combination methods. However, we find no relation between the level of consideration and CAR suggesting that investors perceive the consideration to be adequate based on the company’s financial and operating conditions at the time of the reform.

ceshi

近年来，随着我国国有商业银行改革的不断推进，国有商业银行公司治理结构的不断完善，国有控股商业银行高管激励问题也引起社会越来越普遍的关注。本报告在对完善的商业银行高管激励机制进行探究的基础上，通过结合目前我国国有控股商业银行高管激励的现状，对我国国有控股商业银行高管激励问题提出建设性意见。

随着国内金融控股公司基于交叉销售的综合金融战略的实施，客户信息的收集、保管、使用和披露过程中涉及到的客户信息保护和在现有法律限制范围内的客户信息共享与交叉利用之间的协调变得越来越重要。本文从客户信息保护的角度区分不同客户信息来源探讨金融控股公司如何在现有分业经营的条件下实现跨系列的客户信息合规的交叉利用，真正实现集团综合经营的战略协同效应。分析了金融控股公司客户信息的分类和客户信息共享交叉使用的风险，最后详细分析了客户信息规范化获得和交叉使用的原则、策略与实施要点，以便中国金融控股公司在微观的操作实践层面真正实现客户信息的合规交叉利用，实现交叉销售的综合经营战略。