Dual-class share structures and financial outcomes in high-tech firms: evidence from US-listed China concept stocks

This study investigates the effect of dual-class share structures on high-tech firms' financial outcomes. Using a unique and hand-collected high-tech sample of China concept stocks that launched their IPOs on the US stock exchange between 2000 and 2018, we find that high-tech firms with dual-class share structures have better financial performance than propensity-matched single-class firms. Channels for the financial promotion effect of dual-class share structure include increasing debt financing and promoting R&D innovation. Heterogeneity tests show that this effect is more pronounced for high-tech firms with larger boards, higher information transparency, and the simultaneous implementation of sunset clauses. Our findings can be useful references for the practical application of dual-class shares in Chinese capital markets.