IDEAS home Printed from https://ideas.repec.org/a/eme/jespps/v38y2011i4p360-383.html
   My bibliography  Save this article

Is China's independent director system working? The case of the electronics industry

Author

Listed:
  • Yenpao Chen
  • Chien-Hsun Chen
  • Will C. Wu

Abstract

Purpose - This paper sets out to explore the effects that the setting-up of an independent director system has on the operating efficiency of information electronics companies in China. Design/methodology/approach - This paper uses 87 Chinese listed electronics companies during the initial stages of the independent directors system from 1999 to 2002 as sample subjects, and employs a two-stage procedure for empirical investigation. Findings - The non-parametric test results verify that there is no significant difference in the operating efficiency of Chinese electronics companies following the establishment of an independent director system. The Tobit regression results show that the establishment of an independent director system in the Chinese electronics industry does not influence overall technical efficiency (TE), pure technical efficiency (PE), or scale efficiency (SE). Research limitations/implications - Whether the related schemes of the current corporate governance structure practised in China can achieve their expected results, as well as the possible future development direction of the governance structure, is of the utmost importance, and is a research subject worth examining in greater depth. Practical implications - It is of the utmost urgency for such corporate governance to improve the selection mechanism for independent directors, to establish incentives and responsibility-taking mechanisms for independent directors, and to amend the company law and securities law to perfect the rules of an independent director system. Originality/value - By using DEA and the Tobit regression model, this study attempts to investigate whether China, in addition to fraud prevention, has improved corporate operating efficiency by introducing a system of independent directors.

Suggested Citation

  • Yenpao Chen & Chien-Hsun Chen & Will C. Wu, 2011. "Is China's independent director system working? The case of the electronics industry," Journal of Economic Studies, Emerald Group Publishing, vol. 38(4), pages 360-383, September.
  • Handle: RePEc:eme:jespps:v:38:y:2011:i:4:p:360-383
    as

    Download full text from publisher

    File URL: http://www.emeraldinsight.com/10.1108/01443581111160842?utm_campaign=RePEc&WT.mc_id=RePEc
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Souksavanh Vixathep & Nobuaki Matsunaga, 2012. "Firm Efficiency in Cambodia's Garment Industry on the Eve of the Multi-Fiber Arrangement Termination," Asian Economic Journal, East Asian Economic Association, vol. 26(4), pages 359-380, December.
    2. Fragoudaki, Alexandra & Giokas, Dimitris, 2016. "Airport performance in a tourism receiving country: Evidence from Greece," Journal of Air Transport Management, Elsevier, vol. 52(C), pages 80-89.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jespps:v:38:y:2011:i:4:p:360-383. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman). General contact details of provider: http://www.emeraldinsight.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.