The Unique Nature of Chinese Corporate Governance Practices


Corporate Governance

How to Cite

The Unique Nature of Chinese Corporate Governance Practices. (2011). Journal of Business Strategies, 28(1), 23-51.


This study investigates a fairly broad array of factors which may influence
Chinese corporate governance and examines the relationships between firm age, top
management team age, board structure, ownership structure and firm performance
in publicly-listed Chinese firms. As we anticipated, owing to the unique context of
corporate China, results support a negative relationship between firm age and firm
performance, a positive relationship between percentage of independent directors
and firm performance, and a positive relationship between the presence of foreign
blockholders and firm performance. This study also found a positive relationship
between the percentages of shares owned by the state as a blockholder and firm performance,
but found that neither private nor institutional blockholders influence firm
outcomes. Results also indicate that the relationship between top management age
and firm performance is mediated by firm size. The expected negative relationship
between CEO duality and performance and positive relationship between board size
and firm performance is not supported. These results indicate that there are some
unique features of Chinese governance practices that need to be considered by researchers
seeking to test the applicability of western theories in the Chinese context.


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