Abstract:

The main findings of this paper are: 1) poorer legal protection of shareholders gives rise to higher ownership concentration in the case of Chinese domestically listed companies; 2) whereas the legal environment is keeping improving, ownership concentration is even on the rise instead of coming down; 3) State share has a negative impact on the corporate performance, while legal share does the opposite; 4) companies with relatively high ownership concentration generally perform better. Furthermore, ownership concentration does a better job in explaining corporate performance (solving classical corporate governance issues) than such variables as executive compensation, board structure, financial structure do.

Keywords: Corporate governance, environment ownership, concentration, corporate performance