Overconfidence, ownership control and financial distress in different types of state-owned enterprises: evidence from China / Abraham Simon Otim Emuron ...[et al.]

Emuron, Abraham Simon Otim and Tian, Yixiang and Coffie, Cephas Paa Kwasi and Opoku-Mensah, Evans (2021) Overconfidence, ownership control and financial distress in different types of state-owned enterprises: evidence from China / Abraham Simon Otim Emuron ...[et al.]. Management and Accounting Review (MAR), 20 (3): 4. pp. 82-106. ISSN 2550-1895

Official URL: https://mar.uitm.edu.my/

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
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
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