The two essays in my dissertation are about the ownership structure in Chinese stock markets. The first essay investigates ownership structure and firm performance. Although previous studies have examined the relationship between ownership and firm performance of privatized firms in China, the results are inconclusive. This paper argues that the inconsistent empirical evidence is because these studies ignore the influence of state policies that simultaneously impact firm value and ownership. The Hausman test confirms the existence of an endogenous relationship between firm value and ownership concentration. After controlling for the effects of state policies and economic factors, it concludes that ownership concentration has a negative effect on firm performance.
The second essay uses Chinese listed firms which conduct Split-share Structure Reform (Share Reform hereafter) to investigate market reactions around several event days during the reform processes. It is found that investors in China perceive that the Share Reform has a positive impact on stock price, both when the reform prospectus is disclosed and when the consideration is paid. However, investors feel the reform will have a negative impact on stock price on the days that the date of the lockup expirations is announced, because Share Reform deals with the liquidity problem of non-tradable shares, and thus supply will increase when these shares can be traded. Moreover, it is found that payment of a consideration, the proportion of restricted shares after Share Reform, and a time gap between suspension and resumption days are the factors that affect market reaction. Furthermore, firm liquidity before the reform, price pressure, and the type of ultimate shareholder affect the consideration paid.

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