Agency Theory and Corporate Governance in China: A Meta-analysis
Canan C. Mutlu, Marc Van Essen, Mike W. Peng and Sabrina F. Saleh
Coles Working Paper Series, FALL16-10, November 2016
Do “good corporate governance” principles apply to China? A straightforward answer to this question is lacking because evidence is inconclusive across studies. Leveraging a database consisting of 81 studies and 272 effect sizes, along with 200,739 firm observations and 636,713 firm-year observations between 1991 and 2008, we endeavor to fill this gap by conducting the first meta-analysis on the China literature with two foci. First, we assess the impact of (i) board independence, (ii) board leadership structure, and (iii) managerial incentives on firm performance, as these elements have been central to Chinese corporate governance reforms. Second, we extend current theorizing by showing support for the temporal hypothesis which states that over time, with the improvement in the quality of market institutions and development of financial markets, the monitoring mechanisms of the board become more important whereas the incentive mechanisms lose their significance. Overview
20 | Coles Working Paper
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