A review of corporate governance in China

Authors

  • Jingjing Yang,

    1. Massey University, NZ, and Jiangxi Normal University, China
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  • Jing Chi,

    1. Massey University
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  • Martin Young

    1. Massey University
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    • Jingjing Yang is a PhD candidate at the School of Economics and Finance, Massey University, NZ, and Lecturer, School of Inter-culture Studies, Jiangxi Normal University, China; Jing Chi is Senior Lecturer, School of Economics and Finance, Massey University; and Martin Young is Professor in Finance, School of Economics and Finance, Massey University


Abstract

The paper reviews the literature on internal and external corporate governance mechanisms in China. Chinese regulatory bodies have made considerable efforts to improve the corporate governance of listed firms. However, research has shown that most of the governance instruments that are effective in developed nations are less effective in China. We attribute the ineffectiveness to the large stake of the state in listed firms, strong political connections between listed firms and the government, and the lack of a truly independent judicial system. Some suggestions for making corporate governance more effective in China are provided.

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