Does bank ownership increase firm value? Evidence from China

作者：Lin Xiaochi; Zhang Yi; Zhu Ning^*

来源：Journal of International Money and Finance, 2009, 28(4): 720-737.

DOI：10.1016/j.jimonfin.2008.12.015

• Banking
• Bank ownership
• Valuation
• Emerging markets
• Chinese financial markets

Direct bank ownership of company shares is believed to benefit borrowing companies in developed markets. However, little is known about how such bank relationship works in emerging markets, where the relative costs and benefits of such practice become less straightforward due to loose institutional background and weak governance. Utilizing novel data on bank equity ownership and board structure of listed companies in China, one of the leading emerging markets, we find that: 1. banks hold considerable shares of listed companies; 2. banks appoint board members through equity holdings; 3. bank ownership promotes company access to bank capital; 4. companies with banks as leading shareholders witness relatively poor operating performance. Such results are robust with alternative performance measures, industries, and sample periods. Further analysis indicates that inefficient investments resulting from bank ownership are responsible for the disappointing performance. Our results provide new insights to the debate regarding the merits of bank equit

• 出版日期2009-6
• 单位北京大学