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The Impact of Board Characteristics on Corporate Performance: Evidence from Chinese A-share Market

In: Proceedings of the 2024 4th International Conference on Enterprise Management and Economic Development (ICEMED 2024)

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  • Heng Quan

    (Nanjing University)

Abstract

The purpose of this paper is to investigate the impact of board characteristics on corporate performance within China’s A-share market. Drawing upon agency theory and resource dependence theory, this study posits four hypotheses - namely, board size(B_SIZE), board compensation(B_COMP), gender diversity(G_DIV) and financial background(F_BKGD) - as potential determinants of corporate performance. The study included all publicly listed companies in the A-share market in 2022, excluding financial institutions and ST companies, as the research subjects for conducting an Ordinary Least Squares (OLS) regression analysis. The regression results indicate a advantageous correlation between board compensation and corporate performance, as well as a positive impact of gender diversity on corporate performance. However, contrary to our initial prediction, a detrimental effect on corporate performance is observed from having a financial background. Furthermore, the influence of board size is found to be statistically insignificant, suggesting a potential quadratic relationship with the independent variables. These findings carry significant implications for Chinese market investors in assessing company performance and for listed companies to enhance their board structure optimization.

Suggested Citation

  • Heng Quan, 2024. "The Impact of Board Characteristics on Corporate Performance: Evidence from Chinese A-share Market," Advances in Economics, Business and Management Research, in: Hongbing Cheng & Sikandar Ali Qalati & Noor Sharoja Binti Sapiei & Mazni Binti Abdullah (ed.), Proceedings of the 2024 4th International Conference on Enterprise Management and Economic Development (ICEMED 2024), pages 60-68, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-506-5_8
    DOI: 10.2991/978-94-6463-506-5_8
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