THE IMPACT OF MANAGEMENT SHAREHOLDING ON INVESTMENT AND SENSITIVITY OF CASH FLOW FROM INVESTMENT OF CHINESE STATE-OWNED AND NON STATE-OWNED LISTED COMPANIES

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Published: Dec 22, 2024
Keywords:
Management Shareholding Stated-Owned Enterprise Investment Cash Flow Sensitivity

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Ben Liu
Chinese Graduate School, Panyapiwat Institute of Management, Thailand

Abstract

In agency theory, it is believed that management shareholding is a method of motivation in corporate governance, which is used to motivate the management by combining managers and shareholders’ interests in more effective ways in order to reduce agency conflict. Based on Chinese listed companies, the sample data was divided into state-owned and private enterprises, and a comparative study was carried out on the impact of management’s shareholding on their investment and investment cash flow sensitivity. The study found that the introduction of management shareholding variables has a significant positive impact on investment and a significant impact on reducing the sensitivity of investment cash flow when looking at the overall sample of China’s listed companies. However, when comparing state-owned enterprises and private enterprises separately, it was found that after introducing the variable of management shareholding, management shareholding has no significant impact on the investment of state-owned enterprises but has a significant positive impact on the investment of private enterprises. At the same time, management’s shareholding has no significant impact on state-owned enterprises in reducing the sensitivity of investment cash-sensitive flows, but has a significant impact on private enterprises. Subsequently, this study can serve as a reference for policy makers regarding SOE reforms.

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How to Cite
Liu, B. (2024). THE IMPACT OF MANAGEMENT SHAREHOLDING ON INVESTMENT AND SENSITIVITY OF CASH FLOW FROM INVESTMENT OF CHINESE STATE-OWNED AND NON STATE-OWNED LISTED COMPANIES. Chinese Journal of Social Science and Management, 8(2), 157–172. Retrieved from https://so01.tci-thaijo.org/index.php/CJSSM/article/view/258538
Issue
Vol. 8 No. 2 (2024): July-December 2024
Section
Research Articles
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