The Empirical Analysis of the Impact of Quality of Corporate Governance Upon Corporate Performance and Value of the China’s Listed Companies

Abstract: How to improve the quality of corporate governance has been focused by the capital market all the time. The quality of corporate governance not only influences the development of the whole stock market from macroscopic, but also influences the market value of the stock of listed companies from microcosmic. At present most articles about company's value or performance and corporate governance in China emphasize a certain specific respect such as ownership structure, structure and composition of the board of directors and independent director, but they have not considered the impact of a series of mechanisms of corporate governance on company's performance and value in an all-round way. So, this paper will adopt corporate governance ranking system of Chinese listed companies of "Beijing Liancheng International Advisor Co., Ltd." to scale the quality of corporate governance, and carry on empirical researches to study the impact of quality of corporate governance upon company performance and value in our country.First, this paper reviews status quo of corporate governance and corporate performance and value both at home and abroad, and analyses the new trend. Then this paper analyses the relationship between corporate governance and company performance and value from Principal-agent Theory and "balanced view ", and analyses themeasurement and status quo of corporate governance of our country listed companies. At last, we do empirical researches about company's value and corporate governance, dividing companies into groups and comparing corporate performance or value, and building up OLS model and 2LS model. The overall conclusion that the paper draws is as follows: First, better corporate governance is highly correlated with higher corporate performance. The higher the quality of corporate governance is, the better company's performance is. Second, investors would like to pay about 4% to 9% premiums for these companies with good corporate governance and third better corporate governance is highly correlated with higher corporate value. The higher the quality corporate governance is, the better company's value is…
Key words: Corporate Governance; corporate performance ; Corporate Value; Empirical Analysis

This entry was posted in Master Thesis. Bookmark the permalink.