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Ownership concentration, foreign shareholding, audit quality, and stock price synchronicity: Evidence from China
journal contribution
posted on 2010-03-01, 00:00 authored by Ferdinand GulFerdinand Gul, J B Kim, A A QiuThis paper investigates the effects of largest-shareholder ownership concentration, foreign ownership, and audit quality on the amount of firm-specific information incorporated into share prices, as measured by stock price synchronicity, of Chinese-listed firms over the 1996-2003 period. We show that synchronicity is a concave function of ownership by the largest shareholder with its maximum at an approximate 50% level. Further, we find that synchronicity is higher when the largest shareholder is government related. We also find that foreign ownership and auditor quality are inversely associated with synchronicity. Finally, we show that the amount of earnings information reflected in stock returns is lower for firms with high synchronicity. © 2009 Elsevier B.V. All rights reserved.
History
Journal
Journal of Financial EconomicsVolume
95Issue
3Pagination
425 - 442Publisher DOI
ISSN
0304-405XPublication classification
C Journal article; C1.1 Refereed article in a scholarly journalCopyright notice
2009, Elsevier B.V.Usage metrics
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