Data, concept of control, and summary statistics on changes in control
This study examines the frequency, causes and consequences of control changes using a sample of Chinese listed firms for the years 1996 to 2006. To identify changes in control, a concept of control that is based on ultimate share ownership is applied. This is significant because given the trading restrictions of different share classes and the historical relationship between listed and unlisted parent companies Chinese listed firms are in their majority ultimately controlled by local governments through pyramids or cross-ownership structures. This makes changes in direct ownership less meaningful.
KeywordsPrivate Firm Transfer Price Large Shareholder Announcement Date Listed Firm
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- 111.Kato and Long (2006, p. 803) also use the ultimate controller classification of SinoFin in their study.Google Scholar
- 112.To the best of my knowledge, the classification of the ultimate controller by SinoFin is the most comprehensive database on ultimate control in Chinese listed firms. WIND’s database on ultimate control only ranges from 2004 to 2006. Liu and Sun (2005) trace the chain of control for 1,105 listed firms and calculate the percentage shareholdings of their ultimate controllers. However, their information stops in 2001 and is not yet publicly available.Google Scholar
- 113.See also Green and Liu (2005, pp. 133–134) and Cai and Chen (2004, p. 69).Google Scholar
- 114.Regardless of the price paid in the transaction, Barclay and Holderness (1989 and 1991) report that block transfers in the US are accompanied by positive cumulative abnormal returns surrounding the announcement date of these trades. Wang and Zhang (2004, p. 9) examine the stock price reactions after 587 negotiated block transfers in the SHSE and SZSE for the 1996 to 2000 period. They generally confirm that announcement dates of block trades are associated with positive cumulative abnormal returns.Google Scholar
- 115.See Green and Liu (2005, p. 134).Google Scholar
- 116.See Huang and Xu (2005, p. 23)Google Scholar