Dissertation > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods

Research on the Influence of Corporate Governance of Listed Companies over Business Performance in Hebei Province

Author GuoLiHua
Tutor ZhaoBangHong
School Agricultural University of Hebei
Course Agricultural Economics and Management
Keywords Listed Companies in Hebei Province Corporate Governance Governance Mechanism Business Performance Cast Study
CLC F276.6;F224
Type PhD thesis
Year 2007
Downloads 498
Quotes 6
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Good corporate governance will not only reduce the surrogate cost and operation risk but also increase the internal value and performance of listed companies. In the meantime, capital configuration is optimized in a larger scope and the continuous steady growth of macro economy is enhanced. In recent years, the overall performance of listed companies in Hebei province is not so good and the corporate governance is not structure, for which the unhealthy governance structure is one of the causes.For many years, the discussion of corporate governance issues by the majority of scholars has been focusing within the scope of listed companies nationwide. Seldom the character and pattern of corporate governance in a specific region and the influence over the business performance are deeply researched. In view of the fact that the efficiency of corporate governance is relatively low for listed companies in Hebei province, this thesis endeavors to conduct a complete and systematic analysis of existing performance and the influence of corporate governance over business performance with listed companies in Hebei province as the target of research and by means of demonstration. Thus, new area is identified in the theoretical research of corporate governance through induction and extraction and pertinent suggestions are practically given on the improvement of corporate governance for listed companies in Hebei province.Conclusions through case study mainly include:1. Of the equity structure of listed companies in Hebei province, the state-owned shares account for an extremely high percentage, the institutional shares are rather small, the internal shareholding is proportionally low, the equities are concentrated and the proportion of big shareholders varies greatly. Through case study, it reveals that state-owned shares play an active role in the corporate governance and the institutional shares, due to the low percentage, could hardly be an active supervisor in the corporate governance. The functions of tradable shares and insider shareholding are not given full display. The concentrated shares positively influences the business performance, the result of which is consistent with the conclusion that the state shareholding is big in Hebei province, which exerts a positive influence over the business performance.It is believed that while optimizing their equity structure, these listed companies in Hebei province shall not simply focus on the inherent disadvantage of state-owned shares but on the cultivation of effective equity holder. At the same time, the percentage of insider shareholding shall be properly increased and the enthusiasm of shareholders shall be revoked, which is the key to enhance the efficiency of corporate governance.2. The asset-liability ratio of listed companies in Hebei province is climbing for years in a row, which does not necessarily mean that their financing preference is changed. This phenomenon is mainly attributable to the vicious cycle resulting from the inappropriate financing and utilization of fund by certain companies of bad performance as well as the failure of listed companies to effectively leverage their debts, for which the presumption is proved by the regression result of research. It is clear that the consciousness to optimize the capital structure is yet to be improved and the leverage of debt shall be fully tapped.3. The scale of board of directors and the percentage of independent directors, though numerically compliant with relevant provisions, the regression result however indicates that due to the inadequate knowledge of board of directors and independent director system, plus the deficiency of the independent system itself, the functions of board of directors and independent director are not given the opportunity of full display. The case study also reveals that the number of board meetings and the business performance are negatively correlated, which implies there may be a significant waste of efficiency in the act of board. Hence, it is proposed herein that in the governance of board, these listed companies shall pay more attention to the change of concept and the improvement of efficiency.4. The number and percentage of shareholding by executives in these listed companies are both relatively low and the number of executives receiving remuneration and then-average remuneration are also in a low level. Such character of incentive mechanism for executives is reflected in the fact that the annual income for executives is the only variable element positively affect the business performance and other variants seem not directly related. In view of the status quo that the incentive for executives is mainly remuneration in Hebei province, it is believed that the executives of listed companies shall pay more attention to the rationality of remuneration structure, to diversify the incentive patterns so as to fully leverage the incentive mechanism.

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