Share Cross-ownership Regulation and Stock Process: Evidence from the Chinese Market and Recommendations for Philippine and Vietnamese Laws

Tran Nguyen Phuoc Thong

doi:10.53899/spjrd.v28i1.231

Authors

Tran Nguyen Phuoc Thong Cooperation Center for Lawyer Training on International Trade Judicial Academy (Thu Duc District, Ho Chi Minh City, Vietnam) https://orcid.org/0009-0005-7462-657X

DOI:

https://doi.org/10.53899/spjrd.v28i1.231

Keywords:

cross-ownership of shares, Chinese market, Philippine law, share price, Vietnamese law

Abstract

Cross-shareholding promotes price synchronization and reduces price lag. More importantly, this effect on price informativeness is evident for large companies and during market downturns. In general, the relationship between cross-ownership structure and stock price informativeness exists clearly. This paper investigates the impact of share cross-ownership on stock prices as a measure of price informativeness from companies listed on the Chinese stock exchange. The paper has learned an overview of cross-ownership and the stock market in China through jurisprudence analysis and comparative jurisprudence method. At the same time, the author also discusses the positive effects of regulation and cross-ownership structure on stock prices to better understand the relationship between cross-ownership and price dynamics through the impact of cross-ownership on the information environment. A notable point that the paper also discusses is the advantages of symmetric cross-ownership compared to the process of merger of joint stock companies to determine the balance between market efficiency and the social welfare loss brought about by symmetrical cross-ownership. From there, the paper will evaluate the influence of cross-ownership in Vietnamese and Philippine laws through agency theory and corporate governance models, and will finally make some recommendations for Philippine and Vietnamese laws.

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Author Biography

Tran Nguyen Phuoc Thong, Cooperation Center for Lawyer Training on International Trade Judicial Academy (Thu Duc District, Ho Chi Minh City, Vietnam)

Teaching Assistant, Cooperation Center for Lawyer Training on International Trade, Judicial Academy Ho Chi Minh City, Vietnam

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