A critique of corporate governance in China

Guo, Liang; Smallman, Clive; Radford, Jack

doi:10.1108/ijlma-10-2011-0012

Cited by 31 publications

(32 citation statements)

References 59 publications

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“…Shares held by state-owned shareholders exceed other shares held by other shareholders (individuals and NSOEs) in Chinese companies. Guo et al (2013) reported that by end of September 2006, largest shareholders who held 56% of shares were state shares controlled by Chinese government and other state asset management companies.…”

Section: China As a Unique Market Settingmentioning

confidence: 99%

Dynamics of financial leverage across firm life cycle in Chinese firms: an empirical investigation using dynamic panel data model

Rehman

Wang

2016

China Financ. and Econ. Rev.

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Background: This study tries to investigate how firms adjust their leverage policy across the firm's life cycle. For this purpose the study uses an extensive set of data of 867 A listed Chinese non-financial firms over a nineteen years period (1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014). Methods: The study employs Arellano-Bover/Blundell-Bond dynamic panel data model to estimate adjustment rate of leverage and its determinants in three different life stages of Chinese firms. We find that adjustment rate of leverage varies for different life stages. Results: In accordance with trade off theory of capital structure this study reports a low-high-low pattern of leverage across growth, maturity and decline stage of firms' life respectively. For total leverage, dynamic panel data reports highest adjustment rate for growing firms, followed by mature firms and firms in declining stage of their life. Conclusions: Both short term and long term leverage report similar pattern of leverage's adjustment rate across the three stages of life cycle. The study provides useful insight in a unique market setting of Chinese financial markets.

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Section: China As a Unique Market Settingmentioning

confidence: 99%

Dynamics of financial leverage across firm life cycle in Chinese firms: an empirical investigation using dynamic panel data model

Rehman

Wang

2016

China Financ. and Econ. Rev.

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“…Chinese companies are highly concentrated in term of ownership concentration. A single largest owner holds about 36% of an average company share, while 52% shares are held by five biggest owners (Guo et al 2013). This higher ownership concentration will affect the decision making process regarding Chinese firms.…”

Section: Introductionmentioning

confidence: 99%

“…Moreover the situation becomes more complex while considering the fact of SOEs and NSOEs. Guo et al (2013) reported that by end of September 2006, largest shareholders who held 56% of shares were state shares controlled by Chinese government and other state asset management companies. Until 1998, the largest Chinese banks (most of them were state owned) were advised not to give credit to Chinese private companies.…”

Section: Introductionmentioning

confidence: 99%

Corporate Cash Holdings and Adjustment Behaviour in Chinese Firms: An empirical Analysis Using Generalized Method of Moments

Rehman¹,

Wang²

2015

AABFJ

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This study is intended to find out the motives of cash holding in Chinese firms and theories associated with these motives. The study is unique because it not only estimates the adjustment speed of corporate cash holdings but also discuss several firm specific factors that affects cash holdings in Chinese firms with special reference to Chinese SOEs and NSOEs. An extensive set of panel data comprising 1632 A listed Chines firms, over a period from 2001 to 2013 are taken for analysis. The study reports a lower adjustment coefficient for Chinese firms compared to other developed nations. The study finds that target level of cash holdings in Chinese firms is better explained by Trade off and Pecking order theories. To cope with issues of endogeneity and serial correlation the study apply GMM and random effects model with an added AR (autoregressive) term. Keywords AbstractThis study is intended to find out the motives of cash holding in Chinese firms and theories associated with these motives. The study is unique because it not only estimates the adjustment speed of corporate cash holdings but also discuss several firm specific factors that affects cash holdings in Chinese firms with special reference to Chinese SOEs and NSOEs. An extensive set of panel data comprising 1632 A listed Chines firms, over a period from 2001 to 2013 are taken for analysis. The study reports a lower adjustment coefficient for Chinese firms compared to other developed nations. The study finds that target level of cash holdings in Chinese firms is better explained by Trade off and Pecking order theories.To cope with issues of endogeneity and serial correlation the study apply GMM and random effects model with an added AR (autoregressive) term. JEL Classification: M41, G34

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“…Even Germany has initiated a process of transformation in this direction (Yeoh, 2007). Nevertheless, there are exceptions, such as China, where the mechanisms implemented in the West have no impact on the state-run companies of this Asian country (Guo et al, 2013). Another problem that has been identified is the excessive concentration of power in the hands of majority shareholders, to the detriment of minority shareholders (Agyemang & Castellini, 2015).…”

Section: Discussionmentioning

confidence: 99%

“…Therefore, they are in violation of the guidelines of the country's Ministry of Corporate Affairs. Guo et al (2013) study the corporate governance of state-owned companies in China, finding that mechanisms implemented in the West have no impact in this Asian country due to the strong relationship between the companies and the State. For his part, Payne (2016) emphasizes that although clear distinctions remain, there is a growing similarity between American and European corporate governance.…”

Section: Codes Of Corporate Governancementioning

confidence: 99%

Corporate Governance: International Context and Trends from 2005 to 2015

Jaimes-Valdez¹,

Hernández²,

Ochoa-Jimenez³

2017

IJBM

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Corporate governance is a topic that in recent years has been related to fraud and economic crises, which could be reasons for pessimism; however, this study views it as an opportunity to improve the organizational environment. Therefore, this exploratory study is conducted with the purpose of identifying the context in which corporate governance occurs and potential international trends. The review of the literature indicates that corporate governance codes based on the model of insider information are gradually being replaced by American and British models, which are characterized by democracy, transparency, and accountability. Similarly, there is emphasis on the importance of bringing organizations and interest groups closer together and building consensus to develop activities that are in the common interest and that provide benefits to all. Finally, further studies are recommended to improve national and international standards concerning corporate governance with the aim of balancing the interests of organizations and their stakeholders.

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A critique of corporate governance in China

Cited by 31 publications

References 59 publications

Dynamics of financial leverage across firm life cycle in Chinese firms: an empirical investigation using dynamic panel data model

Dynamics of financial leverage across firm life cycle in Chinese firms: an empirical investigation using dynamic panel data model

Corporate Cash Holdings and Adjustment Behaviour in Chinese Firms: An empirical Analysis Using Generalized Method of Moments

Corporate Governance: International Context and Trends from 2005 to 2015

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