Global Journal of Management and Business Research, A: Administration and Management, Volume 22 Issue 8

Hansen’s chi 2 (P-value) Stock & Yoko (2004) Weak Instrument Test 310.75 (0.000) First-stage F-Statistics 13.16 (0.000) 423.58 (0.000) 36.27 (0.000 32.40 (0.000) 28.45 (0.000) Hansen (1978) Specification Test 58.07 (0.582) 59.07 (0.5822) 145.56 (0.000) 145.57 (0.000) 4.27 (1.000) 4.27 (1.000) a) Robustness Check To further check the robustness of the results reported in Tables VI and VII, we have undertaken a difference and difference-in-difference regression. 19 The results of BLOCK, PFOR, and LEV are positive and statistically significant at a 1% level, thus suggesting that BLOCK, PFOR, and LEV are important mechanisms for monitoring managerial decisions. Furthermore, the results of IORA suggest that an increase in total assets is seen as a positive signal for growth and encourages a positive outlook among investors. Thus the firm is positively evaluated as measured by Tobin’s Q. However, the coefficient of SIZE is negative and is statistically significant at a 1% level, The results are reported in Table VIII. The difference measures the change in the independent variable that contributes to the change in the dependent variable, that is, ∆Yit = ∆X it + ε it, where ∆Yit = Yit – Yit-1 and ∆Xit = Xit – Xit-1. On the other hand, difference-in-difference measures 2∆Yit = 2∆Xit + ε it, where 2∆Yit = (Yit – Yit-1) – (Yit-1 – Yit-2) = Yit – 2Yit-1 +Yit-2 and 2∆X it = (Xit – Xit-1) – (Xit-1 – Xit-2) = Xit – 2Xit-1 +Xit-2. The results reported in columns 2 and 3 in Table VIII show that the presence of the central government as the largest shareholder contributes positively to Tobin’s Q. The difference and difference-in- difference regression results also show that the coefficient of SOECG is positive and is statistically significant at a 1% level, thus suggesting that the central government as the largest shareholder provides a measure of vigilance over managerial decisions. The results reported in Table IV show that the performance of SOECGs is positive but not better than that of SOELGs and PRIVATEs. This suggests that the positive performance of SOECGs is the result of the central government’s cherry-picking of industries for investment rather than close monitoring. The results reported in columns 4 and 5 in Table VIII show that the participation of local government as the largest shareholder (SOELG) does not contribute to firm performance, nor does the private investor (PRIVATE) as the largest shareholder (refer to columns 6 and 7 in Table VIII). These results possibly reflect misappropriation by local government and private investors and suggest that tunneling activities may be involved. 19 We thank the anonymous reviewer for suggesting that we use the difference and difference-in- difference method to check for robustness in our OLS and 2SLS regression. thus suggesting that firm size is not at an optimal level. This result is not surprising, since industries in China are new and still in the development stage. Consequently, firm size may have been developed only to suboptimal levels as a temporary response to market demand. The Relationship between Ownership Identity, Ownership Concentration, and Firm Performance: Evidence from China 27 Global Journal of Management and Business Research Volume XXII Issue VIII Version I Year 2022 ( ) A © 2022 Global Journals