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system under which the state is entitled only to a dividend on its share inthe SOEs’assets.Increased management autonomy accompanied by the
need to raise capital externally,however,led to the need for improved
governance structures.The listing of shares on both domestic and inter-
national exchanges is viewed as an essential part of this reform.In add-
代写留学生论文ition to providing a conduit for external capital,listing is expected to
improve corporate governance,information disclosure,and efficiency.
2.3 Share Listings by PRC Companies
Share listings by PRC companies are controlled by the State Planning
Commission,which determines an annual quota for listings on the two
domestic(Shanghai and Shenzhen)and international exchanges.Two types
of shares are listed on the domestic exchanges:“A-Share”listings that are
only offered to domestic investors and are transacted in Renminbi;and
“B-Share”listings that,until recently,were only offered to foreign investors
and are transacted in US$(Shanghai)or HK$(Shenzhen).2 Approximately
20 per cent of A-Share firms are also authorized to issue B-Shares.“H-
Share”listings are issued on the SEHK and“N-Share”listings on the New
York Stock Exchange,either through Initial Public Offerings or American
Depository Receipts.Approximately 50 per cent of firms authorized to
issue H-Shares are also listed on PRC domestic exchanges as A-Shares;
none of the H-Share firms are also authorized to list as B-Shares.3
Red-Chip listings on the SEHK are initiated by their controlling PRC
government unit and are subject to approval by the State Planning Com-
mission,which sets limits on the number of shares that may be issued and
the amount of capital that may be raised.As Hong Kong(foreign)incorp-
orated entities,Red-Chip firms are not eligible for listing on the PRC
domestic exchanges.The PRC government maintains a substantial interest
in all listed enterprises.For example,in 1995,average combined state and
legal-person ownership was 62 and 58 per cent on the Shanghai and
Shenzhen exchanges,respectively.With respect to financial reporting,
A-Share listings are required to comply with PRC GAAP and B-Share
listings with IASC standards.Shares listed on the SEHK and NYSE follow
exchange requirements.
2.4 Disclosure by PRC-listed Firms
PRC firms listed on the two domestic exchanges voluntarily disclose little,
if any information beyond the exchange requirements(Haw et al.,2000).
?Blackwell Publishers Ltd.2002.
130 M.J.Ferguson,K.C.K.Lam and G.M.Lee
3.Because the primary objective for both H-and B-Share listings is to raise foreign
capital,it is considered redundant to allow individual firms to issue both types of shares.
4.The majority of the annual reports surveyed were for the year ended December 31,
1995 and June 30,1996.Less than 5 per cent of the sample were for the year ended
June 30,1995.
5.As indicated in Table 1,most H-Share firms(16 of 20)are in the manufacturing
industry.To assess whether our results are driven by an industry effect,two additional tests
were performed.First,our primary analysis(equation 1)for the full sample was repeated
with a manufacturing industry(dummy)indicator included in the regression model.The
H-Share firm variable remained significant(p 0.01)and the coefficient for manufactur-
ing industry membership was insignificant.Second,our primary analysis(excluding