Governance and performance in China’s real estate sector

L. Xu, R.P. McIver, George G. Shan, X. Wang

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

© 2016, © Emerald Group Publishing Limited.Purpose – The purpose of this paper is to link literature on China’s real estate sector and the impact of governance, ownership and political connectedness on firm financial performance. Whether these factors impact listed real estate firms differently to firms in other industry sectors is identified. Design/methodology/approach – The paper uses pooled 2008-2013 data on A-share firms. Tobin’s Q captures firm financial performance. Explanatory variables include corporate governance, ownership, local government political connectedness, accounting data and ultimate control. Two-way interactions are estimated between real estate and ownership, governance, political connectedness and other variables. Three-way interactions are estimated between real estate, ownership, control and political connectedness. Year and industry fixed effects are absorbed. Findings – Industry concentration and proportion of state ownership appear to positively impact performance. Firm size, gearing and greater foreign ownership appear to negatively impact performance. However, differences are identified for real estate firms, in which state control and gearing positively impact performance. Greater state and foreign ownership as well as supervisory board size negatively impact performance. Finally, state control in the presence of local government connections negatively impacts performance, while greater state ownership in the presence of local government connections positively impacts performance. Originality/value – A lack of empirical evidence on the impact of corporate governance, ownership structures and political connectedness on firm performance in China’s real estate sector is addressed. Importantly, relationships among these factors and the financial performance of China’s listed real estate firms differ to those of firms in other industries.
Original languageEnglish
Pages (from-to)585-603
Number of pages19
JournalManagerial Finance
Volume42
Issue number6
DOIs
Publication statusPublished - 2016

Fingerprint

China
Real estate
Governance
Connectedness
Industry
Local government
State ownership
Financial performance
Ownership
Foreign ownership
Interaction
Corporate governance
Firm performance
Factors
Fixed effects
Board size
Accounting data
Empirical evidence
Firm size
Industry concentration

Cite this

Xu, L. ; McIver, R.P. ; Shan, George G. ; Wang, X. / Governance and performance in China’s real estate sector. In: Managerial Finance. 2016 ; Vol. 42, No. 6. pp. 585-603.
@article{e60e9965a44a4492946935c119a73060,
title = "Governance and performance in China’s real estate sector",
abstract = "{\circledC} 2016, {\circledC} Emerald Group Publishing Limited.Purpose – The purpose of this paper is to link literature on China’s real estate sector and the impact of governance, ownership and political connectedness on firm financial performance. Whether these factors impact listed real estate firms differently to firms in other industry sectors is identified. Design/methodology/approach – The paper uses pooled 2008-2013 data on A-share firms. Tobin’s Q captures firm financial performance. Explanatory variables include corporate governance, ownership, local government political connectedness, accounting data and ultimate control. Two-way interactions are estimated between real estate and ownership, governance, political connectedness and other variables. Three-way interactions are estimated between real estate, ownership, control and political connectedness. Year and industry fixed effects are absorbed. Findings – Industry concentration and proportion of state ownership appear to positively impact performance. Firm size, gearing and greater foreign ownership appear to negatively impact performance. However, differences are identified for real estate firms, in which state control and gearing positively impact performance. Greater state and foreign ownership as well as supervisory board size negatively impact performance. Finally, state control in the presence of local government connections negatively impacts performance, while greater state ownership in the presence of local government connections positively impacts performance. Originality/value – A lack of empirical evidence on the impact of corporate governance, ownership structures and political connectedness on firm performance in China’s real estate sector is addressed. Importantly, relationships among these factors and the financial performance of China’s listed real estate firms differ to those of firms in other industries.",
author = "L. Xu and R.P. McIver and Shan, {George G.} and X. Wang",
year = "2016",
doi = "10.1108/MF-01-2015-0010",
language = "English",
volume = "42",
pages = "585--603",
journal = "Managerial Finance",
issn = "0307-4358",
publisher = "Emerald Group Publishing Limited",
number = "6",

}

Governance and performance in China’s real estate sector. / Xu, L.; McIver, R.P.; Shan, George G.; Wang, X.

In: Managerial Finance, Vol. 42, No. 6, 2016, p. 585-603.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Governance and performance in China’s real estate sector

AU - Xu, L.

AU - McIver, R.P.

AU - Shan, George G.

AU - Wang, X.

PY - 2016

Y1 - 2016

N2 - © 2016, © Emerald Group Publishing Limited.Purpose – The purpose of this paper is to link literature on China’s real estate sector and the impact of governance, ownership and political connectedness on firm financial performance. Whether these factors impact listed real estate firms differently to firms in other industry sectors is identified. Design/methodology/approach – The paper uses pooled 2008-2013 data on A-share firms. Tobin’s Q captures firm financial performance. Explanatory variables include corporate governance, ownership, local government political connectedness, accounting data and ultimate control. Two-way interactions are estimated between real estate and ownership, governance, political connectedness and other variables. Three-way interactions are estimated between real estate, ownership, control and political connectedness. Year and industry fixed effects are absorbed. Findings – Industry concentration and proportion of state ownership appear to positively impact performance. Firm size, gearing and greater foreign ownership appear to negatively impact performance. However, differences are identified for real estate firms, in which state control and gearing positively impact performance. Greater state and foreign ownership as well as supervisory board size negatively impact performance. Finally, state control in the presence of local government connections negatively impacts performance, while greater state ownership in the presence of local government connections positively impacts performance. Originality/value – A lack of empirical evidence on the impact of corporate governance, ownership structures and political connectedness on firm performance in China’s real estate sector is addressed. Importantly, relationships among these factors and the financial performance of China’s listed real estate firms differ to those of firms in other industries.

AB - © 2016, © Emerald Group Publishing Limited.Purpose – The purpose of this paper is to link literature on China’s real estate sector and the impact of governance, ownership and political connectedness on firm financial performance. Whether these factors impact listed real estate firms differently to firms in other industry sectors is identified. Design/methodology/approach – The paper uses pooled 2008-2013 data on A-share firms. Tobin’s Q captures firm financial performance. Explanatory variables include corporate governance, ownership, local government political connectedness, accounting data and ultimate control. Two-way interactions are estimated between real estate and ownership, governance, political connectedness and other variables. Three-way interactions are estimated between real estate, ownership, control and political connectedness. Year and industry fixed effects are absorbed. Findings – Industry concentration and proportion of state ownership appear to positively impact performance. Firm size, gearing and greater foreign ownership appear to negatively impact performance. However, differences are identified for real estate firms, in which state control and gearing positively impact performance. Greater state and foreign ownership as well as supervisory board size negatively impact performance. Finally, state control in the presence of local government connections negatively impacts performance, while greater state ownership in the presence of local government connections positively impacts performance. Originality/value – A lack of empirical evidence on the impact of corporate governance, ownership structures and political connectedness on firm performance in China’s real estate sector is addressed. Importantly, relationships among these factors and the financial performance of China’s listed real estate firms differ to those of firms in other industries.

U2 - 10.1108/MF-01-2015-0010

DO - 10.1108/MF-01-2015-0010

M3 - Article

VL - 42

SP - 585

EP - 603

JO - Managerial Finance

JF - Managerial Finance

SN - 0307-4358

IS - 6

ER -