Title: An empirical study on financial performance evaluation of Chinese A and H cross-listed companies
Authors: Yanli Zhu; Binrang Zhu; Jingyi Lang
Addresses: Business School, Institute of Industrial Economics, Hohai University, No. 8 Focheng West Road, Nanjing, 211100, Jiangsu, China; Fujian Provincial Key Laboratory of Statistics, Xiamen University, China ' Business School, Hohai University, No. 8 Focheng West Road, Nanjing, 211100, Jiangsu, China ' Institute of Finance and Economics, Shanghai University of Finance and Economics, No. 777 Guo Ding Road, Shanghai, 200082, China
Abstract: With the improvement of China's economic openness and the perfection of capital market, an increasing number of mainland Chinese companies have been listed on both the mainland stock exchanges (A-share) and the Hong Kong Stock Exchange (H-share). Facing intense international competition, it is urgent for the cross-listed companies to improve their financial performance and further achieve sustainable development. This paper evaluates the financial performance of Chinese A and H cross-listed companies based on a list of financial indicators in 2016 using the factor analytic approach. In this paper, we construct a new financial performance evaluation system based on the financial data of these companies. A comparison of different industries, ownerships and economic zones is also conducted. Our empirical findings include: First, we extract four aspects of ability, including profitability, operation ability, debt-paying ability and development ability, to comprehensively reflect the financial performance of Chinese A and H cross-listed companies. Second, we confirm that there are significant variations in the financial performance of Chinese A and H cross-listed companies among industries, ownerships and economic zones. Lastly, some suggestions are further provided in accordance with the evaluation results to improve the financial performance of Chinese A and H cross-listed companies.
Keywords: cross-listed companies; financial performance; factor analysis.
International Journal of Business Performance Management, 2019 Vol.20 No.3, pp.229 - 246
Received: 16 Feb 2018
Accepted: 25 Jul 2018
Published online: 29 Aug 2019 *