Title: Corporate governance and corporate performance: some evidence from newly listed firms on Chinese stock markets

Authors: Langnan Chen, Steven Li, Weibin Lin

Addresses: Lingnan (University) College, Zhongshan University, Guangzhou 510275, China. ' IGSB and School of Commerce, Division of Business, University of South Australia, Adelaide, SA5001, Australia. ' Lingnan (University) College, Zhongshan University, Guangzhou 510275, China

Abstract: This paper is concerned with some corporate governance issues related to newly listed firms in China, based on a sample of 329 firms commencing listing on Shanghai Stock Exchange (SHSE) and Shenzhen Stock exchange (SZSE) during the period from 1998 to 2000. We first investigate the impact of ownership change due to stock market listing on corporate performance measured in terms of profitability, sales, leverage and employee productivity. Our results indicate that, on average, profitability, sales and employee productivity have improved from pre-listing to post-listing. We further investigate the impacts of state majority control, foreign ownership and regulation effects on corporate performance. Overall, this paper provides some new evidence on the listing effect, ownership structure and regulation effect on Chinese firms which will be valuable to the future reform of state owned enterprises.

Keywords: corporate governance; corporate performance; state-owned enterprises; Chinese stock market; China; business governance; ownership change; profitability; sales; leverage; employee productivity; state majority control; foreign ownership; regulation.

DOI: 10.1504/IJAAPE.2007.015233

International Journal of Accounting, Auditing and Performance Evaluation, 2007 Vol.4 No.2, pp.183 - 197

Available online: 28 Sep 2007 *

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