Corporate Governance in China: A Step Forward
Hong Kong Baptist University (HKBU) - Department of Finance and Decision Sciences
City University of Hong Kong (CityUHK)
Sasin GIBA of Chulalongkorn University
Chinese Academy of Social Sciences (CASS)
European Financial Management, Vol. 16, Issue 1, pp. 94-123, January 2010
Recently, the presumed benefits of corporate governance have become one of the most contentious issues especially for emerging markets in Asia where institutional settings are quite different from other parts of the world. Using an internationally accepted benchmark (OECD's Principles of Corporate Governance, OECD, 2004), this study evaluates the progress of corporate governance practice of Chinese listed companies. A corporate governance index (CGI) is constructed to measure the quality of corporate governance practices of the 100 largest listed firms in China during 2004-2006. The results show that Chinese companies have been making progress in the corporate governance reform. The findings also show a positive relation between market valuation and overall corporate governance practices, as measured by the CGI, among these Chinese listed companies. Additional investigation reveals that the rights of shareholders are the main driver in the relationship.
Number of Pages in PDF File: 30Accepted Paper Series
Date posted: December 28, 2009
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