Corporate governance in China: Some empirical evidence

Abstract

Every country has its own cultural, historical, political and economic features which determine their systems of corporate governance. Also the People’s Republic of China (here after China), which is becoming one of the largest economies, has its unique and distinctive characteristics. However, compared to most of developed countries, the topic of corporate governance appeared later in China, due to the Shanghai and Shenzhen stock exchanges were set up at the beginning of 90’s and the first Code of Corporate Governance issued in 2002. In many aspects, the study of corporate governance in China attracts the attention of researchers worldwide, who provide different theoretical and empirical studies on this subject. The purpose of my thesis is to provide a detailed study on corporate governance in China, assessing some aspects empirically. The study is organized as follows: in the first chapter I will briefly explain the model of corporate governance in China, its evolution, legal framework and internal and external players which shape it; in the second chapter I will give a general overview of theoretical and empirical literature on different aspects of corporate governance in China; finally I will give empirical evidence of some corporate governance- related aspects, presenting the methodology and the results respectively in the third and fourth chapter. In order to carry on the research, a sample of Chinese listed companies’ annual reports during the period 2003-2017 were analyzed. In particular, the first empirical analysis aims at evaluating the level of corporate governance disclosure referring to the Code of Corporate Governance and other CSRC regulations, a dichotomous/binary scale method was used. The second one aims at analyzing the relation between board of directors and companies’ profitability ratios, due to there are different opinions in literature. In particular, the total number of directors in the board and the number of independent directors in the board were analyzed in relation to companies’ profitability ratios, Pearson correlation method was used.