Tunneling and propping up: An analysis of related party transactions by Chinese listed companies

• Published in: Pacific-Basin finance journal Vol. 17; no. 3; pp. 372 - 393
• Main Authors: Cheung, Yan-Leung, Jing, Lihua, Lu, Tong, Rau, P. Raghavendra, Stouraitis, Aris
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.06.2009; Elsevier
• Series: Pacific-Basin Finance Journal
• Subjects: China; International corporate governance; International corporate governance China Related party transactions Tunneling Propping; Propping; Related party transactions; Tunneling; China; Related party transactions; Tunneling; Propping; G34; International corporate governance; G15; K33

We examine a sample of related party transactions between Chinese publicly listed firms and their controlling shareholders during 2001–2002. Minority shareholders in these firms seem to be subject to expropriation through tunneling but also gain from propping up. On balance, there seems to be more t...