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The role of financial institutions in the corporate governance of listed Chinese companies

Yuan, Rongli, Xiao, Jason Zezhong, Milonas, Nikolaos and Zou, Joe Hong 2009. The role of financial institutions in the corporate governance of listed Chinese companies. British Journal of Management 20 (4) , pp. 562-580. 10.1111/j.1467-8551.2008.00602.x

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Abstract

This paper explores the role of Chinese financial institutions in the corporate governance of listed companies through interviews with both senior managers of financial institutions and board directors of listed companies. Our results show that, while most securities companies are passive investors, a good proportion of the active mutual funds help their portfolio companies prepare financial forecasts, standardize their operations, raise external funds, strengthen their company image in the capital markets, and sometimes intervene in corporate issues. This limited role can be attributed to a number of factors specific to the Chinese context including highly concentrated state ownership, an immature regulatory environment, inadequate transparency and disclosure of financial information, and weak corporate governance within financial institutions themselves. It could also be affected by several other factors that are considered to cause institutional passivity in developed countries such as conflicts of interest, monitoring costs and lack of expertise.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce
H Social Sciences > HG Finance
J Political Science > JQ Political institutions Asia
Publisher: Wiley Blackwell
ISSN: 1045-3172
Last Modified: 04 Jun 2017 03:29
URI: http://orca.cf.ac.uk/id/eprint/21895

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