Abstract
This study distinguished between the different forms of ownership in China’s listed state-owned enterprises (SOEs) and then examined how managerial overconfidence within these forms of ownership control affects firms’ likelihood of facing distress. Ownership control was categorized into distinct forms of ownership, namely, state asset management bureaus (SAMBs), state owned enterprises (SOEs) affiliated to the central government (SOECGs), and SOEs affiliated to the local government (SOELGs). Using a sample of China’s listed SOEs from 2003 – 2018 this study empirically proves that China’s listed SOEs managerial overconfidence is significantly related to financial distress, however the possibility of falling prey to financial distress varies depending on the type of ownership control (SAMBs, SOELGs, and SOECGs) responsible for managing firms’ affairs. We observed that, in the presence of overconfident managers, SAMBs are the least likely to face financial distress followed by SOECGs, with SOELGs have the highest chance of falling into financial distress. This study contributes to the literature by providing evidence that lumping SOEs into one homogeneous group is biased as the different forms of ownership controls have unique characteristics.
Metadata
Item Type: | Article |
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Creators: | Creators Email / ID Num. Emuron, Abraham Simon Otim abraham@std.uestc.edu.cn Tian, Yixiang UNSPECIFIED Coffie, Cephas Paa Kwasi UNSPECIFIED Opoku-Mensah, Evans UNSPECIFIED |
Subjects: | H Social Sciences > HG Finance |
Journal or Publication Title: | Management and Accounting Review (MAR) |
UiTM Journal Collections: | UiTM Journal > Management & Accounting Review (MAR) |
ISSN: | 2550-1895 |
Volume: | 20 |
Number: | 3 |
Page Range: | pp. 82-106 |
Keywords: | Overconfidence, Ownership Control, Financial Distress, Stateowned Enterprises, China |
Date: | December 2021 |
URI: | https://ir.uitm.edu.my/id/eprint/61673 |