Governing Enterprises in China: Corporate Boards, Ownership and Markets (Dynamics of Asian Development)

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. Preface Contents About the Authors Symbols and Abbreviations List of Figures List of Tables 1 Introduction 1.1 Fundamentals of Corporate Governance 1.2 Background of the Study 1.2.1 China’s State Enterprise Reform by Stages 1.2.2 China’s Capital Market Reform 1.2.3 Split-Share Reform 1.2.4 Legal Infrastructure 1.2.5 Corporate Markets 1.3 Motivation for Study 1.4 Problematizing Corporate Governance 1.5 Objectives 1.6 Outline of Book 2 Theoretical Considerations 2.1 Introduction 2.2 Critical Theories 2.2.1 Agency Theory 2.2.2 Institutional Theory 2.2.3 Stewardship Theory 2.2.4 Stakeholder Theory 2.2.5 Power Circulation Theory 2.3 Key Concepts and Past Empirical Evidence 2.3.1 Board Structure 2.3.2 Board Independence 2.3.3 Supervisory Board 2.3.4 Board Size 2.3.5 CEO’s Influence 2.3.6 Ownership Structure 2.3.7 Split-Share Structure Reform 2.3.8 Controlling Shareholders 2.4 Hypotheses Formulation 2.4.1 Scope of Operation 2.4.2 Monitoring Hypothesis 2.4.3 Bargaining Hypothesis 2.5 Summary 3 Methodology 3.1 Introduction 3.2 Conceptual Framework 3.3 Analytical Framework 3.4 Research Design 3.4.1 Research Approach 3.4.2 Hypotheses Development 3.4.3 Modelling 3.4.4 Sample and Data 3.4.5 Statistical Robustness 3.5 Summary 4 Determinants of Board Composition 4.1 Introduction 4.1.1 Description of Variables 4.2 Variations in Corporate Governance Mechanisms During Reform 4.3 Board Size and Board Independence During the Reform 4.3.1 Determinants of Board Size and Board Independence 4.3.2 Determinants of Board Size 4.3.3 Determinants of Board Independence 4.3.4 Determinants of Board Size and Board Independence During Reform 4.3.5 Determinants of Board Size and Board Independence Before and After Split-Share Structure Reform 4.3.6 Determinants of Board Size: A Comparison of Controlling Shareholders 4.3.7 Determinants of Board Independence: Comparing Controlling Shareholders 4.4 Summary 5 Corporate Governance Mechanisms and Firm Performance 5.1 Introduction 5.2 Influence of Corporate Governance Mechanisms on Firm Performance 5.2.1 Linear Estimation 5.2.2 Nonlinear Estimation 5.3 Joint Effect of Board Structure, Ownership Structure and CEO Characteristics on Firm Performance 5.4 Influence of Controlling Shareholders on Firm Performance 5.5 Controlling Shareholders and Corporate Governance’s Impact on Firm Performance 5.6 Corporate Governance Mechanisms and Firm Performance: Before and After Reform 5.7 Summary 6 Corporate Governance Mechanisms and Firm Risk-Taking 6.1 Introduction 6.2 Influence of Corporate Governance Mechanisms on Firm Risk-Taking 6.2.1 Linear Estimation 6.2.2 Non-linear Estimation 6.3 Joint Effects of Board Structure and Ownership Structure on Firm Risk-Taking 6.4 Influence of Controlling Shareholder Types on Firm Risk-Taking 6.5 Influence of Corporate Governance Mechanism on Firm Risk-Taking: Comparison of Controlling Shareholders 6.6 Influence of Corporate Governance Mechanisms on Firm Risk-Taking Before and After Reform 6.7 Summary 7 Conclusions 7.1 Synthesis of Findings 7.1.1 Determinants of Board Composition 7.1.2 Corporate Governance and Firm Performance 7.1.3 Corporate Governance and Firm’s Risk-Taking Conduct 7.2 Implications for Theory 7.3 Implications for Policy 7.4 Directions for Future Research Appendix A Appendix B Appendix C Appendix D References Index