Migration of Controlling Shareholders and Firm Value: Evidence from China

Abstract

During the last 35 years, the accomplishment of Chinese business achieved probably more profoundly than any other time. Since 1978, that is the year of Reform and Opening-up, the first foreign enterprise, Panasonic was set up, till now China has established more than 900,000 foreign enterprises and attracted more than 2.1 trillion US dollars of foreign investment. Meanwhile, in response to the Going Global Policy, some Chinese migrated to other countries and the number of overseas Chinese had exceeded 47.3 million by the end of 2018, making China the world's largest exporter of the immigrant. Entrepreneurs, as one of the particular groups, also joined this trend. Therefore, understanding whether and how the migration of controlling shareholders affects firm value and innovation are very important to minority shareholders and policymakers. Taking advantage of Chinese unique disclosure policy, this paper uses public firms listed in Shanghai and Shenzhen Stock Exchanges as the study samples to uncover the black box