earticle

영어

Due to the absence in discipline mechanism for the start-ups, the start-ups in China show a low rate of survival. This study, drawn upon corporate governance theory, examines the relationship between ownership concentration and the firm value, reflecting the country uniqueness. While the reported relationships are inconsistent, we propose that, following the theory, at a lower level of ownership concentration, owners share vision and protect minority shareholders. However, beyond a threshold, concentrated ownership misaligns interests among large shareholders and infringe smaller shareholders under absence of discipline mechanism. Also, we propose that the state ownership constrains this effect of ownership concentration because state controls the firm to satisfy the political goal. Our dataset consists of 217 firms listed in CHASDAQ, with 1,085 firm-year observations during 2017-2021. The fixed-effect analysis supports our hypotheses. Overall, the statistical findings confirm the hypothesized inverted U-shaped relationship and the moderating effects of state ownership. Our study contributes to the corporate governance theory and the business-state relationship literature, by identifying the behaviors of shareholders.