Corporate governance, firm performance, and executive compensation : evidence from China

This study investigates the relationships among corporate governance mechanism, firm performance, and executive compensation within Chinese publicly listed firms. The corporate governance structure in China is a unique combination of the Anglo-American model and the German system by including a board of director and a supervisory board simultaneously, and has two monitoring organs, independent directors and supervisory board, co-existing. One of the special features of the Chinese publicly listed firms is their close relationship with the government because most of them were converted from state-owned enterprises at the beginning of the market-oriented economic reform in China. Therefore, we attempt to explore the effects of political connections of their ultimate controllers on corporate governance mechanism, on firm performance, and on executive compensation in China. Our findings indicate a dysfunctional corporate governance system in China, which cannot bring improved firm performance but grant executives high compensations. While we take into consideration the political connections, our results show that they deteriorate corporate governance mechanism, but do not result in inferior firm performance. Robustness tests demonstrate a non-linear effect of corporate governance on executive compensation, jointly depending on the status of a firm’s political connection and its ownership structure.

Name thesis:degree_name

Master of Science (M.Sc.)

Level thesis:degree_level

Masters

Discipline thesis:degree_discipline

Finance and Management Science

Grantor

University of Saskatchewan

Year dc:date.issued

2010

Author dc:creator

• Li, Xiang

Advisor dc:contributor.advisor

• Wu, Zhenyu

Committee members dc:contributor.committeemember

• Wilson, Craig
• Tannous, George
• Lehar, Alfred
• Racine, Marie

• political connections
• executive compensation
• corporate governance

Language dc:language.iso

en_US

Handle dc:identifier.uri

https://hdl.handle.net/10388/etd-04062010-204624

OAI identifier oai:identifier

oai:harvest.usask.ca:10388/etd-04062010-204624