Corporate governance and firm efficiency: Evidence from China's publicly listed firms
By Chen Lin, Yue Ma, Dongwei Su. 2009
190 citations recorded by the source corpus.
This 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.
Subfields: Accounting, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/022abbab7ecbbeac9069634206497534f341dd5b
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Citations in the corpus
- A framework to analyse the efficiency and governance of zakat institutions (2011, background): “) and also increase the efficiency level ( Lin et al. , 2009”
- The Impact of Capital Structure on Firm Performance: Evidence from Vietnam (2020, unknown): “…of government ownership on firm performance (Sun, Tong, & Tong, 2002), while some studies present a negative effect (Chen, Chen, Lin, & Zhong, 2005; Lin, Ma, & Su, 2009; Qi, Wu, & Zhang, 2000; Wei, 2007) or a U-shape of state ownership on firm performance (Gunasekarage, Hess, & Hu, 2007; Hess,…”
- Corporate Governance Quality and Earnings Management: Evidence from Jordan (2016, background): “Large companies due to their advantage from economies of scale are more able to save costs and thus enhance profitability (Lin et al. 2009).”