Corporate governance in China: A modern perspective

Effect of Disproportional Voting Rights on Firm’s Market Performance: Evidence from Chinese Firms Cross-Listed on U.S. Exchanges

“…Our findings are contrary to the literature, and may be because of the role of institutions in China. It is believed that institutions either do not have power or desire to engage in the monitoring of firms in China (Tenev et al 2002;Chen et al 2007;Jiang and Kim 2015). Abdullah et al (2017aAbdullah et al ( , 2017b show that Chinese dual-class firms possess more institutional ownership, whereas it is evident from the literature that institutions choose to invest in firms where governance practices are adequate, and resist investing in dual-class firms, as they violate the one share, one vote regime (Giannetti and Simonov 2006;Li et al 2008;Dey et al 2016).…”

“…Studying Chinese firms is especially important as China has grown at an exponential rate over the last two decades. Jiang and Kim (2015) encourage future researchers to study cross-listed firms as very few studies have been carried out focusing on Chinese cross-listed firms. We study a sample of 121 Chinese firms cross-listed on U.S. exchanges consisting of 33 dual-class and 88 single-class firms.…”

“…Jiang and Kim (2015) encourage future researchers to study cross-listed firms in China, and express hope that when the number of Chinese cross-listed firms increases, more studies will be carried out to study them. China has been growing exponentially, especially over the last two decades; therefore, understanding Chinese cross-listed firms is particularly important.…”

“…When a firm bonds itself with U.S. exchanges, it decreases insiders' abilities to extract private benefits and it gives a positive sign for their credible commitment towards shareholders' rights (Doidge 2004). Jiang and Kim (2015) witness that shareholder's rights are less protected and corporate governance is weak in China. Chinese dual-class firms bond themselves to high standards which give sign of their credible commitment and show that insiders intend to positively enhance firm value in order to compete and survive in the market imposing high standards.…”

Securities Law Violation and Reputation Loss in the Chinese Capital Market

“…A salient feature of the Chinese stock market is the dominant role played by the state in the corporate sector through direct shareholding. In many cases, stock ownership by the state far exceeds that of other blockholders (Chen et al, 2011a;Jiang & Kim, 2015). By providing the vehicle for the state to pursue objectives beyond profit maximisation (Shleifer, 1998), past studies have shown that State-owned Enterprises (SOEs) receive preferential treatment, for example, in the form of 4 government subsidies and tax exemptions, and financial support from stateowned financial institutions (Chen et al, 2008b;Poncet et al, 2010;Wu et al, 2013).…”