Download or read book Board Structure Political Influence and Firm Performance an Empirical Study on Publicly Listed Firms in China written by Dongping Han and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The board of directors is the cornerstone of any effective corporate governance system. A well-structured board can effectively monitor and motivate management of a company for the benefit of the company's shareholders. This paper investigates the relationship between board structure and firm performance using a sample of 490 publicly listed firms in China. The characteristics of board structure we examined include: board size, inside/outside/independent directors, CEO/Chair duality, stock holdings of directors, the rewards to directors and aged directors. We find significant relationship between firm performance and three characteristics: the rewards to director, the stock holdings of directors and the existence of independent directors. We also find political influences on the effectiveness of boards. When state ownership is more than 50% (state-dominating), rewards and stock holdings of directors are useful. When state ownership is less than 50% (non-state-dominating), the existence of independent directors takes effects. In addition, our analyses indicate that state ownership affects firm performance. State ownership is positively related to firm performance in state-dominating group while negatively related to firm performance in non-state-ownership group.

Download or read book Corporate Governance Firm Performance and Executive Compensation written by and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the relationships among corporate governance mechanism, firm performance, and executive compensation within Chinese publicly listed firms. The corporate governance structure in China is a unique combination of the Anglo-American model and the German system by including a board of director and a supervisory board simultaneously, and has two monitoring organs, independent directors and supervisory board, co-existing. One of the special features of the Chinese publicly listed firms is their close relationship with the government because most of them were converted from state-owned enterprises at the beginning of the market-oriented economic reform in China. Therefore, we attempt to explore the effects of political connections of their ultimate controllers on corporate governance mechanism, on firm performance, and on executive compensation in China. Our findings indicate a dysfunctional corporate governance system in China, which cannot bring improved firm performance but grant executives high compensations. While we take into consideration the political connections, our results show that they deteriorate corporate governance mechanism, but do not result in inferior firm performance. Robustness tests demonstrate a non-linear effect of corporate governance on executive compensation, jointly depending on the status of a firms political connection and its ownership structure.

Download or read book Corporate Governance in China written by Wei'an Li and published by John Wiley & Sons. This book was released on 2008 with total page 276 pages. Available in PDF, EPUB and Kindle. Book excerpt: Great progress has been achieved for the structural reform in China enterprises for the past one and a half decades. Along with the reform, the corporate governance structure has been established accordingly. The Chinese Corporate Governance Index (CCGINK) is a useful tool to objectively observe and analyze shareholder behavior, board execution, management incentive and restriction, supervisory committee operation, information disclosure and stakeholders’ interest protection, and is helpful in diagnosing issues that may arise during corporate operations. The CCGINK provides guidance for improvement of corporate governance, and can be used to enhance the sustainable development of corporations.—Chen Qing-Tai, Vice Director, Economic Committee, National Committee of Chinese People’s Political Consultative Conference (CPPCC), Former Vice Director of Development and Research Center of the State Council Dean, Public Administration School of Tsinghua University The phenomenal growth of China's capital markets during the past decade belies the fact that Chinese companies have only gradually adopted modern corporate governance structures. Professor Li’s book offers a candid and timely assessment of the quality of the governance mechanisms they employ including the factors that influence their quality and how they relate to subsequent corporate performance. A proper understanding is critical for global investors with an interest in China's markets and for scholars who seek to disentangle corporate governance theory and practice in a fascinating market place. —G. Andrew Karolyi, Charles R. Webb Professor of Finance The Ohio State University Corporate governance is a vital issue that China listing companies and enterprises has to deal with. This book reports an important investigation on the subject of corporate governance. As a major result of the study, a series of governance indices conforming to China’s situation were proposed in the book. The author of the book hence received the Award of Outstanding Contribution in Chinese Enterprise Management, and I was very pleased to preside the ceremony to present him with this prestigious award. —Cheng Si-Wei, Vice Chairman of the Standing Committee of National People’s Congress, Vice President of Fudan Management Award Foundation Corporate governance issues are important around the world. The ability of a firm to raise capital, to align with partners, and ultimately, to sell products and services to customers, all depend, to some extent, on the quality of corporate governance. This is why the research reported here is so important. That it focuses on corporate governance among Chinese corporations makes it all the more important. With only a limited history of publicly-traded firms, Chinese firms are inventing—right now—the kinds of corporate governance they will need to compete in global markets. It is hard to imagine a more timely research endeavor. —Jay B. Barney, Professor and Chase Chair for Excellence in Corporate Strategy, The Ohio Stae University

Download or read book Governing Enterprises in China written by Zhang Cheng and published by Springer Nature. This book was released on 2021-06-24 with total page 175 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines the nature of the marketization of corporate boards following the introduction of the split share reform, corporate board and shareholder relations, corporate performance, and risk-taking conduct in China. The chapters cover topics such as determinants of corporate board size and independence, corporate risk-taking conduct under different controlling shareholder types. The book deepens our understanding of corporate governance mechanisms as most previous studies have limited their findings using mainstream perspectives grounded on neoclassical theory. It outlines that China’s corporate board composition is determined by the board’s scope of operation, monitoring, bargaining power, and other governance mechanisms and regulations. It also offers a comparison between China’s experience with other economies in general and other transition economies in particular. As such, the book represents an essential overview of the current concerns regarding corporate governance in China. It is of great interest to legal researchers, policymakers, and legal practitioners working with business investments in China.

Download or read book Ownership Structure Corporate Governance and Corporate Performance The Case of Chinese Stock Companies written by Yan Wang and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: June 1997 Does the ownership structure of publicly listed firms in China affect their performance? Yes. Institutional shareholders seem to have a positive impact on corporate governance and performance; state ownership seems to lead to inefficiency; and an overly dispersed ownership structure can create problems in the Chinese setting. Xu and Wang investigate whether ownership structure significantly affects the performance of publicly listed firms in China and if so, in what way. With public listed stocks, one can quantify the ownership mix and concentration, which makes it possible to study this issue. The authors use the recent literature on the role of large institutional shareholders in corporate governance as a theoretical base. A typical listed stock company in China has a mixed ownership structure, with three predominant groups of shareholders- state, legal persons (institutions), and individuals- holding about 30 percent of the stock. (Employees and foreign investors together hold less than 10 percent.) Ownership is heavily concentrated: the five largest shareholders accounted for 58 percent of outstanding shares in 1995, compared with 57.8 percent in the Czech Republic, 42 percent in Germany, and 33 percent in Japan. Their empirical analysis shows that the mix and concentration of stock ownership do indeed significantly affect a company's performance: * There is a positive, significant correlation between concentration of ownership and profitability. * The effect of concentrated ownership is greater with companies dominated by institutions than with those dominated by the state. * The firms' profitability is positively correlated with the fraction of legal person (institutional) shares; it is either negatively correlated or uncorrelated with the fraction of state shares and with tradable A-shares held mostly by individuals. * Labor productivity tends to decline as the proportion of state shares increases. This paper- product of the Office of the Director, Economic Development Institute- part of a larger effort in the Bank to understand and disseminate various models of corporate governance. The study was funded by the Bank's Research Support Budget under the research project Ownership Structure, Corporate Governance, and Firm's Performance (RPO 681-08).

Download or read book Ownership Structure and Company Performance written by JIAYIN. ZHENG and published by . This book was released on 2017-01-26 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation, "Ownership Structure and Company Performance: the Case of Listed Real Estate Companies in Mainland China" by Jiayin, Zheng, 郑嘉吟, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: Although Chinese economy has been growing remarkably, the development of the institutional, legal infrastructure and financial system remains a numbers of distinctive characteristics (Allen et al., 2004). One of the unique features is the dominance role of the government as shareholder of corporations, even for those listed on the stock exchange. This paper investigates empirically the impact of this significant characteristic on company performance. In particular, this dissertation presents an empirical study of the relationship between ownership structure and the company performance of listed property companies in China. Previous theoretical and empirical studies suggest government ownership is detrimental to company performance. Estrin and Perotin (1991) propose that corporations with the government as ultimate owner and/or with a large stake of government shareholding may not pursue profit maximization objective since the government tends to focus on its political objectives rather than the economic ones. Consequently, the firm performance in such government-related publicly listed firms will be inferior. Moreover, Shleifer and Vishny (1998) show that private ownership is preferable to state ownership because the government has a 'grabbing hand' that expropriates firm assets for the benefit of politicians and bureaucrats. However, the impact of state ownership on property company performance in China is more complicated and may not be always be negative due to (1) state owned company usually have better access to cheaper credit offered by major state banks; (2) state owned companies may be able to acquire development rights and can go through the development approval process more smoothly; (3) weaker institutions for protecting small investors in Mainland China's as it is still a less developed equity market; (4) the government may have motive to demonstrate the efficiency of companies that the government has a major stake. By separating property companies into two groups according to the place of listing, namely Mainland listed group and Hong Kong listed group, based on a more recent panel data including 170 real estate firms between 2006 and 2011, this dissertation generates several distinctive results. Firstly, tradable ownership concentration has a significant positive effect on firm performance. Secondly, by separating the property companies into two groups, I found an initial positive but non-linear impact of state ownership on firm performance in Mainland listed property companies; whereas an initial negative but non-linear impact is found in those listed in Hong Kong. However, when the state's stake of shares is relative large, the positive impact outweighs the negative impact in Mainland China. This is because the investor protection rules and regulations and their enforcement are relatively weak in Mainland China, the government shareholder can act as private block-holder and provide effective monitor on management in solving the traditional agency problems. This is not the case in Hong Kong where the market is more transparent and the interests of small investors are better protected. When the state owns a sufficiently large percentage of the shares, the relationship between state ownership and firm performance becomes positive for both groups. This empirical result suggests that the positive impact of

Download or read book The Composition of Board of Directors and Its Impact on Corporate Performance written by Xiaoling Wang and published by . This book was released on 1998 with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Corporate Governance of Chinese Privately Owned Enterprises Listed in Hong Kong written by Xue Peng and published by Open Dissertation Press. This book was released on 2017-01-27 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation, "Corporate Governance of Chinese Privately Owned Enterprises Listed in Hong Kong: an Empirical Study of Three Levels of Agency Problems" by Xue, Peng, 彭雪, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: Chinese privately owned enterprises (POEs) have become a significant component of Hong Kong's capital market, accounting for 13 per cent of the market capitalization of the Stock Exchange of Hong Kong and being the largest group of Mainland companies listed in Hong Kong. However, alongside the unwillingness of the Exchange to publicize this group of Mainland issuers, these firms are generally ignored in the research on corporate governance of Hong Kong-listed Mainland companies. By contrast, Red Chips and H-share companies have received much attention. To fill the gap, this dissertation analyses corporate governance, in particular three levels of agency problems, of Chinese POEs listed in Hong Kong. An empirical study lays a solid foundation for the whole dissertation. It reveals that most Hong Kong-listed Chinese POEs have a controlling shareholder who usually is also the Chairman of the Board. However, with the widespread participation of professional managers in top management, only less than half of these firms are family businesses. Meanwhile, the agency conflict between the controlling shareholder and professional managers is found to be rather intense in these companies. In this respect, the legal and regulatory rules governing the duties of directors of Hong Kong-listed companies, especially those in the Listing Rules, have provided a "bonding function" to help alleviate this conflict. As to the agency conflict between the majority shareholder and minority shareholders, irregularities and misconducts of Mainland POEs and/or their controlling shareholders are found to be particularly detrimental to the investing public in Hong Kong. However, empirical data discloses that the enforcement actions by the Exchange and the Securities and Futures Commission against abusive individuals and companies are insufficient. Besides, public investors do not have practical means to obtain redress for their pecuniary loss. In this connection, two reform suggestions are proposed: establishing a "Minority Shareholder Compensation Plan" and a strong regulatory cooperation mechanism between Hong Kong and the Mainland. This dissertation also explores a third level of agency conflict, namely the relationship between Chinese POEs listed in Hong Kong and one of their vital stakeholders - Mainland local governments. It is found that this relationship is indeed a double-edged sword. The lawful participation of controllers of these firms in the Mainland local political system may benefit the company in the long run, while too closely enmeshed ties between businesses and governments may pose huge risks to overseas listed POEs. In conclusion, this dissertation argues that, since Hong Kong-listed Chinese POEs originated in the Mainland and are essentially operating under the broad background of China's social and economic transition, agency conflicts that exist in these firms have been largely shaped by the social, economic and political milieu of mainland China, and are hence both unique and complicated. By contrast, Hong Kong's regulatory regime so far has played a rather limited role in tackling these agency conflicts. As a result, compared with the disciplines of Hong Kong's capital market, the distinct legal and institutional settings in the Mainland remain a more important factor to the overall performance of Hong Kong-listed Chi

Download or read book Institutions Board Structure and Corporate Performance written by Tao Chen and published by . This book was released on 2014 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates how institutional environment like property rights protection influences the size and composition of corporate boards, and further, how board structure impacts firm performance in China. Using a World Bank survey of 2,400 public and private firms across 18 Chinese cities, I find robust evidence that weaker helping hand from the government is associated with a higher number and proportion of outsiders on the board, after controlling for the effects of firm complexity, growth opportunities, CEO characteristics, ownership, and the potential endogeneity concern. Furthermore, the results show that when firms are operating in a weak property rights environment, more outsiders improve corporate performance.

Download or read book Board Structure and Firm Performance written by Mei Yu and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on the Role of Political Connections in Corporate Finance written by Aoran Zhang and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation investigates the influence of political connections on corporate financing activities in China. The thesis consists of three chapters. In the first essay, we explore whether and how political connections affect the likelihood of completing a cross-border M&A deal for Chinese publicly listed, but privately-owned enterprises (POEs) and the resulting firm performance. In line with the proposed political connection trade-off theory, we demonstrate that POEs with politically connected top managers are more likely to complete a cross-border M&A deal than POEs with no such connections, but that this comes at the cost of negative announcement returns and subsequent lower accounting performance. These findings support the idea that politically connected top managers engage in empire building behavior at the cost of shareholders' wealth. In the second essay, we examine how political connections influence the likelihood of corporate bond issuance for POEs in China. Using a sample of Chinese POEs from 2007 to 2016, the research shows that politically-connected POEs are more likely to issue corporate bonds as a debt-financing instrument than their non-connected counterparts, and that they achieve lower coupon rates (i.e., lower refinancing costs). On the other hand, this research indicates that corporate bond-issuing POEs in China have weaker corporate governance and a surprisingly higher default probability. Overall, the results show that the corporate bond market in China is strongly distorted by political factors. In the third essay, we study how implicit government guarantees affect the yield spreads of Chinese corporate bonds. We presume that quasi-municipal corporate bonds (so called "Chengtou" bonds), issued by local government financing vehicles (LGFVs), carry an implicit government guarantee. Using a sample of publicly traded corporate bonds between 2010 and 2017, we find that bond investors are significantly less sensitive to bond-specific risks for corporate bonds with an implicit government guarantee: the yield spreads of Chengtou bonds are significantly lower than those of corporate bonds issued by POEs in China. We also find that corporate bonds from Northeast China are riskier than those issued by firms elsewhere in the country. Furthermore, we discover that policy changes introduced by the central government, which were intended to regulate local debt financing activities, significantly reduced the gap in yield spreads between Chengtou bonds and bonds issued by POEs. Overall, the empirical results suggest that implicit government guarantees play a crucial role in corporate debt market and that China's recent policy changes reduce the effectiveness of implicit government guarantees, making corporate bond market more market-oriented.

Download or read book Corporate Governance Firm Performance and Information Leakage written by Hui Zhang and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this thesis is to analyse the effect of corporate governance on firm performance and information leakage in the Chinese securities market. As one of the major emerging markets in the world, the results of this thesis are valuable not only to the Chinese market, but also to other emerging markets. To achieve this purpose, data is collected from most of the non-financial listed companies in the two Chinese stock exchanges, which are the Shanghai Stock Exchange and the Shenzhen Stock exchange. The data sample covers the period from 2004 to 2008, since there was a series of new reforms in the Chinese stock market at that time. These reforms include new legislation and the reduction of non-tradable shares. Then this thesis employs the panel technique and the pooled OLS to estimate the effect of corporate governance on firm performance and information leakage in Chinese listed companies. Firstly the relationship between corporate governance and firm performance in Chinese companies is empirically evaluated. The empirical results of this thesis find that the ownership structure of Chinese companies will affect their firm performance. In this thesis, proxies of ownership structure include the proportion of institutional ownership, the proportion of the state ownership, the proportion of shareholdings of the largest shareholder, and the proportion of tradable shares in Chinese companies. A greater proportion of institutional ownership has positive effects on firm performance in Chinese companies. Board subcommittees also help Chinese companies to increase firm performance. The market reforms of 2006 also help Chinese companies to increase their firm performance. However, the board of directors and board of supervisors do not affect firm performance in Chinese companies. Secondly, information leakage in the Chinese Stock Market is empirically assessed. If investors receive corporate material information before the public disclosure, this phenomenon is known as information leakage. The thesis finds that information leakage in the Chinese market is widespread. Finally, the thesis empirically examines the effects of corporate governance on information leakage in Chinese companies. Board subcommittees have negative effects on information leakage in Chinese companies. Other variables of corporate governance do not affect information leakage in Chinese companies. Additionally, the thesis finds that market reform promotes more information leakage in Chinese market. On the basis of the empirical results, the thesis provides the following recommendations. First, the Chinese Stock Market needs to reform the relevant legislation. Second, Chinese companies need to reform their ownership structure. These suggestions may strengthen the internal governance of Chinese listed companies, thereby, increasing firm performance and decrease information leakage.

Download or read book An Empirical Study of SOE Corporate Governance Attributes for Emerging Markets written by Giang Hoang and published by Springer Nature. This book was released on 2023-04-29 with total page 257 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book investigates the institutional characteristics of state-linked firms in Vietnam to draw lessons for investors/MNCs targeting Vietnam and other emerging markets in the region. Vietnam and many other ASEAN countries have gone through a period of privatization and equitization of wholly controlled SOEs, with the State retaining partial ownership in many privatized businesses. This book explains the dynamic relationships between the State, BODs, shareholders, and regulators and their influence on corporate governance and SOE performance. This book differs from other publications in that it extrapolates the findings from our study to a broader context on how the defined internal mechanisms implicate the local economy and global supply chains/markets. This book investigates robust theoretical foundations, and rigorous applied empirical research underpin the role of the State in SOEs. It differs from other studies in terms of qualitative and empirical research to provide the contextual setting to elucidate how to successfully navigate emerging market business with the State as an "owner-participant." This book explains the theoretical constructs of corporate governance in SOEs, applies empirical research methodologies, and draws results to validate inferences to (1) investigate the link between the board of directors and ownership attributes and agency cost levels using Vietnamese listed firms for the period from 2006 to 2013, (2) evaluate the effectiveness of State's corporate initiatives and monitoring through its sovereign wealth fund known as the State Capital Investment Corporation (SCIC), and (3) infer and explain the motivation of the State as a shareholder. This book takes cognizance of Vietnam's idiosyncratic institutional (using its sovereign wealth fund as an investment vehicle and management proxy), economic, regulatory, and corporate environments and the realities for developing an effective and sustainable business model, vis-à-vis the ownership structure, board of directors' composition and corporate governance, for better business performance. While the focus is on Vietnam, the content is also relevant to the role of the State in other emerging markets as a player in shaping the business strategy, model, and direction of SOEs.

Download or read book The Corporate Governance Structure and Corporate Performance written by and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the effectiveness of the corporate governance mechanisms and their impact on corporate performance, using the data of one industry sector? China?s listed real estate companies. The studies include four parts: (1) the ownership structure; (2) the board structure; (3) the manager compensation; and (4) the agency costs measured by asset utilization efficiency and manager discretionary expenses.

Download or read book Corporate Governance Mechanisms for Monitoring or Empowering CEOS A Study of Chinese Listed Firms written by Helen Wei Hu and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the impact of governance mechanisms in monitoring or empowering top executives on firm performance. We distinguish between two competing theories, namely agency theory and stewardship theory, which hold conflicting assumptions about CEOs behaviour and hence offer different recommendations concerning corporate governance structure. We conduct an empirical study based on 837 publicly listed companies in China over the period of 2005-2007, the findings of this study provide strong support for stewardship theory. The results suggest that governance mechanisms that can empower CEOs work better in the Chinese context, specifically, a longer CEO tenure and lower board independence can have positive effects on firm performance.

Download or read book Capitalizing China written by Joseph P. H. Fan and published by University of Chicago Press. This book was released on 2013 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: La 4e de couverture indique : "Despite a vast accumulation of private capital, China is not embracing capitalism. Deceptively familiar capitalist features disguise the profoundly unfamiliar foundations of "market socialism with Chinese characteristics." The Chinese Communist Party (CCP), by controlling the career advancement of all senior personnel in all regulatory agencies, all state-owned enterprises (SOEs), and virtually all major financial institutions state-owned enterprises (SOEs), and senior Party positions in all but the smallest non-SOE enterprises, retains sole possession of Lenin's Commanding Heights. The chapters in this volume examine China's high savings rate, banking system, financial markets, financial regulations, corporate governance, and public finances; and consider policy alternatives the CCP might consider if its goal is China's elevation into the ranks of high income countries."

Download or read book Board Composition and Firm Performance written by Weichu Xu and published by . This book was released on 2016 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we integrate agency theory, resource dependence theory, and institutional perspective to investigate the relationship between the factors associated with the composition of the board of directors and firm performance in the context of emerging economy - China. Our sample will be drawn from 100 public traded companies in Shanghai and Shenzhen stock exchange in China from 1999 to 2015. Using a time series analysis, we hope to find the results show the proportion of independent directors in board composition, the number of interlocked directors in the board, the number of directors from different industry, the number of directors from different types of company will be positively related to firm performance. Furthermore, we expect the results also show that the heterogeneity of board and the size of board will have the positive influence at the beginning but will negative with the increase of heterogeneity and the size. Final we expect that the level of institutions development in China will positively moderate the above-mentioned relationship between characteristics of the board of directors and firm performance.