| Author: | 真才基 Zhen, Caiji |
| Title: | 公司治理结构与长期投资价值 : 基于中国上市公司的实证分析 Gong si zhi li jie gou yu chang qi tou zi jia zhi : ji yu Zhongguo shang shi gong si de shi zheng fen xi |
| Other Title: | Corporate governance and investment efficiency : an empirical analysis of the listed firm in China |
| Degree: | D.B.A. |
| Year: | 2005 |
| Subject: | Hong Kong Polytechnic University -- Dissertations Corporate governance -- China |
| Department: | Graduate School of Business |
| Pages: | xi, 149 leaves : ill. (some col.) ; 30 cm |
| Language: | Chinese |
| Abstract: | The agency theory of Jensen and Meckling (1976) and Jensen (1986) postulates that management may not always maximize shareholders' wealth when making capital expenditure decisions. Management may pursue its own interest such as empire building, resulting in either over-investing or under-investing. Jensen (1993) argues that effective internal control mechanisms may mitigate the agency problem and therefore may improve the efficiency of capital expenditure decisions. Using a sample of 565 listed firms in China from 1999 through 2003, I examine the relationship between internal control mechanisms and investment efficiency. I use ownership structure, board composition, and auditing quality to proxy the internal control mechanisms. Investment efficiency measures are based on the methodology developed in Jensen (1993) and Fama & French (1999). I find some significant relationships between a firm's ownership structure and its investment efficiency, but fail to find any significant relationship between board compositions or auditing quality and investment efficiency. In particular, I find that investment efficiency is negatively related to the level of state ownership, and is positively related to both ownership concentration and the percentage of publicly-owned shares. In addition, firms with lower free cash flows achieve higher investment efficiency, consistent with the agency theory predictions. Our findings seem to suggest that given the dominance of state ownership among the listed firms in China, boards of directors do not serve a significant role in monitoring management, neither does auditing. I also offer some suggestions to policy makers and investors based on my findings. |
| Rights: | All rights reserved |
| Access: | restricted access |
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| File | Description | Size | Format | |
|---|---|---|---|---|
| b20655186.pdf | For All Users (off-campus access for PolyU Staff & Students only) | 46.52 MB | Adobe PDF | View/Open |
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