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

Table 8: Difference and Difference-in-Difference Regression for Ownership Variables and Tobin’s Q as Performance Measure Difference for SOECG Difference-in-Difference for SOECG Difference for SOELG Difference-in-Difference for SOELG Difference for PRIVATE Difference-in- Difference for PRIVATE Constan t 0.012 [0.019] 0.051 [0.035] 0.012 [0.019] -0.044 [0.036] 0.014 [0.019] 0.046 [0.035] SOECG 0.094*** [0.091] 0.964*** [0.098] SOELG 0.107 [0.072] 0.075 [0.077] PRIVATE 0.075 [0.082] -0.009 [0.088] BLOCK 1.418*** [0.178] 1.320*** [0.186] 1.358*** [0.180] 1.275*** [0.189] 1.491*** [0.175] 1.444*** [0.185] PFOR 0.775*** [0.202] 0.518** [0.226] 0.898*** [0.203] 0.629** [0.227] PBDSH -0.009 [0.108] 0.097 [0.109] -0.094 [0.108] -0.009 [0.109] LNDTP 0.163*** [0.017] 0.193*** [0.019] PEXESH 0.247† [0.139] 0.294** [0.140] LNMGP -0.128 [0.177] -0.304† [0.79] -0.095 [0.172] -0.259 [0.172] -0.0001 [0.0001] -0.0000 [0.0001] SIZE -0.739*** [0.015] -0.727*** [0.016] -0.713*** [0.015] -0.698*** [0.016] -0.656*** [0.015] -0.632*** [0.015] LEV 0.925*** [0.032] 0.743*** [0.039] 0.915*** [0.032] 0.726*** [0.039] 0.898*** [0.032] 0.698*** [0.038] IORA 0.283*** [0.032] 0.318*** [0.034] 0.278*** [0.033] 0.312*** [0.034] 0.272*** [0.033] 0.309*** [0.035] F Stats (P Value) 432.13*** (0.000) 299.79*** (0.000) 416.07*** (0.000) 284.97*** (0.000) 402.74*** (0.000) 270.25*** (0.000) R 2 (Root MSE) 0.24 (1.972) 0.22 (3.319) 0.24 (1.981) 0.23 (3.336) 0.23 (1.989) 0.20 (3.354) Obs 10687 8942 10687 8942 10687 8942 VII. C onclusions and P olicy I mplications The results reported in this study show that different types of owners behave differently to promote their firms’ operating efficiency. The “helping hand” from the government tends to benefit both the central SOEs through preferential incentives, such as loans and subsidies, large government orders, and the protection of local industry. These resources tend to be an important factor contributing to SOECGs’ performance. In contrast, the performance of PRIVATEs may be affected as they do not receive similar treatment from the government. Our findings are consistent with those of prior researchers who have reported that policy discrimination may have resulted in serious capital starvation in private firms (Leng, 2009). Our results also show that SOECGs have slightly higher operating costs compared to the SOELGs and PRIVATEs, thus suggesting that SOECGs are still required to meet the government’s social/political objectives even after the SASAC reforms. However, our findings contrast with those of prior studies that reported that state-owned companies are superior to private ones because of their political connections and better corporate governance (Xu and Wang, 1999; Chen et al., 2009). Our findings support the argument made by Stiglitz (1999) that without the helping hand and protection of government, it will be difficult for SOECGs to maintain sustainable performance in the long run. Finally, our results show that the three ownership types (central government, local government, and private investors) tend to determine their incentives by modifying their practice in accordance with a profit- maximizing strategy. Under the strict supervision of the central government, SOECGs show strong, positive alignment with minority shareholders when the largest investors increase their holdings. In contrast, without proper monitoring and with weak legal enforcement at local levels, both SOELGs and PRIVATEs tend to abuse The Relationship between Ownership Identity, Ownership Concentration, and Firm Performance: Evidence from China 28 Global Journal of Management and Business Research Volume XXII Issue VIII Version I Year 2022 ( ) A © 2022 Global Journals