Nature of Ownership,Market Liberalization,and Corporate Risk-taking

Abstract

This paper examines whether the nature of ownership affects corporate risk-taking,and how market liberalization affect the influence of ownership nature on risk-taking.Using data of listed companies in China from 1998—2011 as sample,we take the ultimate controller to judge the ownership nature.We find that,there is a significantly negative association between nature of ownership and corporate risk-taking,and this effect mainly exists in the medium and small-sized firms.Further results find that,a more liberalized market leads bigger gap of risk-taking between the SOEs and the non-SOEs.Meanwhile,we present evidence for that risk-taking has a significantly positive impact on firm's market value,and there is no significant difference between the SOEs and the non-SOEs.Our research not only enriches and develops the research on corporate risk-taking and the efficiency of the state-owned enterprises,and it also has an important enlightenment to corporate invest decision-making and reform of the property rights.