Ownership Structure and Financial Risks: Evidence from Chinese Stock Market

摘要

This paper examines the relationship between the ownership structure and the financial risks.We use the Value-at-Risk(VaR) method which is applied widely in the finance engineering field to measure the financial risk and choose the share percentage the controlling shareholder holds, the separation between the cash flow right and the control right and the state-character of the ultimate controller as the ownership structure variables. We find that share percentage the controlling shareholer holds is negative with the financial risk and the separation between the cash flow right and the controlright is also positive with the financail risk. Moreover, we find that state-owned corporation has a lowerfinancial risk than the non state-owned corporation.