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Going Public with Good Governance: evidence from China

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  • Larry Li
  • Tony Naughton

Abstract

Board characteristics have not been a significant area of study in the IPO literature. We focus on the emerging corporate governance reform in China to investigate the relationship between a range of board characteristics and IPO initial returns and long‐term performance. We find evidence that board size is positively related to short‐term returns, while in the long‐term, a positive relationship exists between performance and the voluntary post‐listing separation of the roles of CEO and Chair of the Board. Our long‐term results suggest that at least some Chinese listed firms are actively and voluntarily moving toward better governance structures.

Suggested Citation

  • Larry Li & Tony Naughton, 2007. "Going Public with Good Governance: evidence from China," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(6), pages 1190-1202, November.
  • Handle: RePEc:bla:corgov:v:15:y:2007:i:6:p:1190-1202
    DOI: 10.1111/j.1467-8683.2007.00640.x
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    File URL: https://doi.org/10.1111/j.1467-8683.2007.00640.x
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    Cited by:

    1. Chalmers, Keryn & Haman, Janto & Qu, Wen, 2014. "China’s Securities reforms and IPO wealth loss," Journal of Contemporary Accounting and Economics, Elsevier, vol. 10(3), pages 161-175.
    2. Farida Titik Kristanti, 2017. "Corporate Governance, Financial Ratios, Political Risk and Financial Distress, A Survival Analysis," GATR Journals afr130, Global Academy of Training and Research (GATR) Enterprise.
    3. Haman, Janto & Chalmers, Keryn & Fang, Victor, 2017. "IPO lockups, long run returns, and growth opportunities," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 49(C), pages 184-199.
    4. Azevedo, Alcino & Guney, Yilmaz & Leng, Jingsi, 2018. "Initial public offerings in China: Underpricing, statistics and developing literature," Research in International Business and Finance, Elsevier, vol. 46(C), pages 387-398.
    5. Richard Heaney & Larry Li & Vicar Valencia, 2011. "Sovereign wealth fund investment decisions: Temasek Holdings," Australian Journal of Management, Australian School of Business, vol. 36(1), pages 109-120, April.
    6. Oehmichen, Jana, 2018. "East meets west—Corporate governance in Asian emerging markets: A literature review and research agenda," International Business Review, Elsevier, vol. 27(2), pages 465-480.
    7. Chien Mu Yeh, 2020. "The influence of foreign institutional investors, institutional directors, and the share pledge ratio of directors on financial performance of tourism firms," Tourism Economics, , vol. 26(1), pages 179-201, February.

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