Title: Market performance and the corporate governance structure: the implications for China

Authors: Edward J. Lusk, Wei Yang, Michael Halperin

Addresses: State University of New York (SUNY) College at Plattsburgh, USA; Department of Statistics, The Wharton School, The University of Pennsylvania, 101 Broad St, SBE: Redcay 139, Plattsburgh, NY 12901, USA. ' Otto-von-Guericke University Magdeburg, P.O. Box 4120, 39016 Magdeburg, Germany. ' The Lippincott Library of the Wharton School, 34th and Walnut St., Philadelphia, PA 19104, USA

Abstract: We empirically identify the relationship between the market performance of firms categorised using both the Kinder, Lydenberg and Domini (KLD) corporate responsibility scale as well as the Gompers, Ishii, and Metrick Corporate Governance (GIM CG) scale for a sample of US-listed firms. Compared to other styles of corporate governance, the autocratic style leads to higher market performance, but is associated with a lower level of Corporate Social Responsibility (CSR). We then discuss how China can learn from such a result while building its own governance structure. Finally, as there is no formal measure of CSR at this time in China, we conjecture about the market reaction to Chinese firms| CSR initiatives.

Keywords: corporate governance; corporate social responsibility; CSR; market performance; China.

DOI: 10.1504/IJCCM.2008.020007

International Journal of Chinese Culture and Management, 2008 Vol.1 No.4, pp.408 - 417

Published online: 20 Aug 2008 *

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