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Is Corporate Governance in China Related to Performance Persistence?

Author

Listed:
  • Lars Helge Haß

    (Lancaster University)

  • Sofia Johan

    (York University—Schulich School of Business
    Tilburg Law and Economics Center)

  • Denis Schweizer

    (Concordia University
    WHU—Otto Beisheim School of Management)

Abstract

This paper examines the relationship between performance persistence and corporate governance (as proxied for by board characteristics and shareholder structure). We document systematic differences in performance persistence across listed companies in China during 2001–2011, and empirically demonstrate that firms with better corporate governance show higher performance persistence. The results are robust over both the short and long terms. We also find that performance persistence is an important factor in refinancing, and it can lower companies’ costs of borrowing. Overall, our findings offer important implications for business ethics, as we demonstrate how corporate governance can lower companies’ costs of debt.

Suggested Citation

  • Lars Helge Haß & Sofia Johan & Denis Schweizer, 2016. "Is Corporate Governance in China Related to Performance Persistence?," Journal of Business Ethics, Springer, vol. 134(4), pages 575-592, April.
    • Handle: RePEc:kap:jbuset:v:134:y:2016:i:4:d:10.1007_s10551-014-2385-3
    DOI: 10.1007/s10551-014-2385-3
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