A-shares can be classified into four groups according to types of shareholders: the state shares, legal person
shares, tradable A-shares, and employee shares. The state shares are held by the central government, local
government, and state-owned enterprises. The legal person shares are owned by domestic institutions including
listed companies and non-bank financial institutions such as insurance companies, securities companies,
investment companies, and mutual funds. The tradable A-shares are held and traded mostly by individual
investors. The employee shares are shares that offered to managers and employees of listed companies as
incentive scheme (Xu & Wang, 1999).