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Related Party Cooperation, Ownership Structure and Value Creation

Received: 17 September 2016     Accepted: 17 October 2016     Published: 28 October 2016
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Abstract

Taking the 141 related party cooperation announcements by Chinese listed companies from January 2001 to December 2013 as the sample, the article investigates the impact of the focal firms’ ownership structure and relative characteristics of related parties on the focal firms’ value creation. The empirical results indicate that ownership concentration negatively affect the value creation, while equity restriction has no influence on the focal firms’ value creation. The related party’s relative scale plays a significantly positive role on the focal firms’ value creation, while the related party’s relative associated relationship is negatively related to the focal firms’ value creation. The article contributes to the current literature by investigating whether the governance mechanism of listed companies could create value for the focal firms under the background of related party cooperation, and providing empirical evidence about the influence of ownership structure and relative characteristics of related party on the focal firms’ value creation.

Published in American Journal of Theoretical and Applied Business (Volume 2, Issue 2)
DOI 10.11648/j.ajtab.20160202.11
Page(s) 8-12
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Related Party Cooperation, Ownership Concentration, Equity Restriction, Value Creation

References
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[2] Djankov, S., La Porta, R., Lopezde-Silanes, F. and Shleifer, A. (2008). The law and Economics of self dealing. Journal of Financial Economics, 88(3): 430-465.
[3] Demsetz, H., Villalonga, B. (2001). Ownership structure and corporate performance. Journal of Corporate Finance, 7(3): 209-233.
[4] Shleifer, A. and Vishny, R. (1986). Large shareholders and corporate control. Journal of Political Economy, 94(3): 461-488.
[5] Liu, F. and Ho, J. (2004). Ownership structure and substantial shareholders’ choice in interest realizing methods: Tentative study on tunneling in Chinese capital market. China Accounting Review, 2(1): 141-158.(In Chinese).
[6] Xu, L., Xin, Y. and Chen, G. (2006). Ownership concentration, outside blockholders, and operating performance: Evidence from China’s listed companies. Economic Research Journal,41(1): 90-100. (In Chinese).
[7] Liu, Y.and Gao, Y. (2007). The relationship between ownership restriction and corporate performance of listed companies in China. Journal of Sun Yatsen University (Social Science Edition), 47(4):102-108. (In Chinese).
[8] McConnell, J. and Servaes, H. (1990). Additional evidence on equity ownership and corporate value. Journal of Financial Economics, 27(2): 596 - 612.
[9] Leech, D. and Leahy, J. (1991). Ownership structure, control type classifications and the performance of large British companies. The Economic Journal, 101(409):1418-1437.
[10] Mudambi, R., and Nicosia, C. (1998).Ownership structure and firm performance: Evidence from the UK financial services industry. Applied Financial Economics, 8:175-180.
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Cite This Article
  • APA Style

    Zhi-hong Song, Xiao-fei Che, Yan-xin Guo. (2016). Related Party Cooperation, Ownership Structure and Value Creation. American Journal of Theoretical and Applied Business, 2(2), 8-12. https://doi.org/10.11648/j.ajtab.20160202.11

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    ACS Style

    Zhi-hong Song; Xiao-fei Che; Yan-xin Guo. Related Party Cooperation, Ownership Structure and Value Creation. Am. J. Theor. Appl. Bus. 2016, 2(2), 8-12. doi: 10.11648/j.ajtab.20160202.11

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    AMA Style

    Zhi-hong Song, Xiao-fei Che, Yan-xin Guo. Related Party Cooperation, Ownership Structure and Value Creation. Am J Theor Appl Bus. 2016;2(2):8-12. doi: 10.11648/j.ajtab.20160202.11

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  • @article{10.11648/j.ajtab.20160202.11,
      author = {Zhi-hong Song and Xiao-fei Che and Yan-xin Guo},
      title = {Related Party Cooperation, Ownership Structure and Value Creation},
      journal = {American Journal of Theoretical and Applied Business},
      volume = {2},
      number = {2},
      pages = {8-12},
      doi = {10.11648/j.ajtab.20160202.11},
      url = {https://doi.org/10.11648/j.ajtab.20160202.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtab.20160202.11},
      abstract = {Taking the 141 related party cooperation announcements by Chinese listed companies from January 2001 to December 2013 as the sample, the article investigates the impact of the focal firms’ ownership structure and relative characteristics of related parties on the focal firms’ value creation. The empirical results indicate that ownership concentration negatively affect the value creation, while equity restriction has no influence on the focal firms’ value creation. The related party’s relative scale plays a significantly positive role on the focal firms’ value creation, while the related party’s relative associated relationship is negatively related to the focal firms’ value creation. The article contributes to the current literature by investigating whether the governance mechanism of listed companies could create value for the focal firms under the background of related party cooperation, and providing empirical evidence about the influence of ownership structure and relative characteristics of related party on the focal firms’ value creation.},
     year = {2016}
    }
    

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  • TY  - JOUR
    T1  - Related Party Cooperation, Ownership Structure and Value Creation
    AU  - Zhi-hong Song
    AU  - Xiao-fei Che
    AU  - Yan-xin Guo
    Y1  - 2016/10/28
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    N1  - https://doi.org/10.11648/j.ajtab.20160202.11
    DO  - 10.11648/j.ajtab.20160202.11
    T2  - American Journal of Theoretical and Applied Business
    JF  - American Journal of Theoretical and Applied Business
    JO  - American Journal of Theoretical and Applied Business
    SP  - 8
    EP  - 12
    PB  - Science Publishing Group
    SN  - 2469-7842
    UR  - https://doi.org/10.11648/j.ajtab.20160202.11
    AB  - Taking the 141 related party cooperation announcements by Chinese listed companies from January 2001 to December 2013 as the sample, the article investigates the impact of the focal firms’ ownership structure and relative characteristics of related parties on the focal firms’ value creation. The empirical results indicate that ownership concentration negatively affect the value creation, while equity restriction has no influence on the focal firms’ value creation. The related party’s relative scale plays a significantly positive role on the focal firms’ value creation, while the related party’s relative associated relationship is negatively related to the focal firms’ value creation. The article contributes to the current literature by investigating whether the governance mechanism of listed companies could create value for the focal firms under the background of related party cooperation, and providing empirical evidence about the influence of ownership structure and relative characteristics of related party on the focal firms’ value creation.
    VL  - 2
    IS  - 2
    ER  - 

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Author Information
  • Institute of Management and Decision, Shanxi University, Taiyuan, China

  • School of Economics and Management, Shanxi University, Taiyuan, China

  • School of Mathematical Sciences, Shanxi University, Taiyuan, China

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