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Article: Corporate governance and firm efficiency: Evidence from China's publicly listed firms

TitleCorporate governance and firm efficiency: Evidence from China's publicly listed firms
Authors
Issue Date2009
PublisherWiley. The Journal's web site is located at http://onlinelibrary.wiley.com.eproxy1.lib.hku.hk/journal/10.1002/(ISSN)1099-1468
Citation
Managerial and Decision Economics, 2009, v. 30 n. 3, p. 193-209 How to Cite?
AbstractThis paper applies a two-stage, double bootstrapping data envelope analysis approach to investigate whether and to what extent various distinctive corporate governance practices affect productive efficiency in a sample of 461 publicly listed manufacturing firms in China between 1999 and 2002. We find that firm efficiency is negatively related to state ownership while positively related to public and employee share ownership. In addition, the relationship between ownership concentration and firm efficiency is U-shaped, indicating the presence of tunneling activities by the largest shareholder. Among three types of controlling shareholder, state exerts the most negative impact on firm efficiency, followed by state-owned legal entities. These results provide strong evidence that political interferences have reduced firm efficiency. It shows that the proportion of outside directors and the number of board meetings are positively associated with firm efficiency, suggesting that board of directors can be an effective internal governance mechanism. Furthermore, provincial market development, a proxy for the strength of external governance mechanism, is positively related to firm efficiency. Overall, our findings illustrate that restructuring state-owned enterprises via improvements in corporate governance has enhanced firm efficiency, but partial privatization without transfer of ownership and control from the state to the public remains a major source of inefficiency in corporate China. Copyright © 2008 John Wiley & Sons, Ltd.
Persistent Identifierhttp://hdl.handle.net/10722/192330
ISSN
2015 SCImago Journal Rankings: 0.546

 

DC FieldValueLanguage
dc.contributor.authorLin, Cen_US
dc.contributor.authorMa, Yen_US
dc.contributor.authorSu, Den_US
dc.date.accessioned2013-10-24T01:49:58Z-
dc.date.available2013-10-24T01:49:58Z-
dc.date.issued2009en_US
dc.identifier.citationManagerial and Decision Economics, 2009, v. 30 n. 3, p. 193-209en_US
dc.identifier.issn0143-6570en_US
dc.identifier.urihttp://hdl.handle.net/10722/192330-
dc.description.abstractThis paper applies a two-stage, double bootstrapping data envelope analysis approach to investigate whether and to what extent various distinctive corporate governance practices affect productive efficiency in a sample of 461 publicly listed manufacturing firms in China between 1999 and 2002. We find that firm efficiency is negatively related to state ownership while positively related to public and employee share ownership. In addition, the relationship between ownership concentration and firm efficiency is U-shaped, indicating the presence of tunneling activities by the largest shareholder. Among three types of controlling shareholder, state exerts the most negative impact on firm efficiency, followed by state-owned legal entities. These results provide strong evidence that political interferences have reduced firm efficiency. It shows that the proportion of outside directors and the number of board meetings are positively associated with firm efficiency, suggesting that board of directors can be an effective internal governance mechanism. Furthermore, provincial market development, a proxy for the strength of external governance mechanism, is positively related to firm efficiency. Overall, our findings illustrate that restructuring state-owned enterprises via improvements in corporate governance has enhanced firm efficiency, but partial privatization without transfer of ownership and control from the state to the public remains a major source of inefficiency in corporate China. Copyright © 2008 John Wiley & Sons, Ltd.-
dc.languageengen_US
dc.publisherWiley. The Journal's web site is located at http://onlinelibrary.wiley.com.eproxy1.lib.hku.hk/journal/10.1002/(ISSN)1099-1468-
dc.relation.ispartofManagerial and Decision Economicsen_US
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.rightsThis is the accepted version of the following article: [Managerial and Decision Economics, 2009, v. 30 n. 3, p. 193-209], which has been published in final form at [http://dx.doi.org/10.1002/mde.1447]. In addition, authors may also transmit, print and share copies with colleagues, provided that there is no systematic distribution of the submitted version, e.g. posting on a listserve, network or automated delivery.-
dc.titleCorporate governance and firm efficiency: Evidence from China's publicly listed firmsen_US
dc.typeArticleen_US
dc.description.naturepostprint-
dc.identifier.doi10.1002/mde.1447en_US
dc.identifier.scopuseid_2-s2.0-66649116021en_US
dc.identifier.volume30en_US
dc.identifier.issue3en_US
dc.identifier.spage193en_US
dc.identifier.epage209en_US

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