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Corporate Governance in China : A Meta-Analysis

Author

Listed:
  • Canan C. Mutlu

    (EM - EMLyon Business School)

  • Marc van Essen
  • Mike W. Peng
  • Sabrina F. Saleh
  • Patricio Duran

Abstract

How has the impact of ‘good corporate governance' principles on firm performance changed over time in China? Amassing a database of 84 studies, 684 effect sizes, and 547,622 firm observations, we explore this important question by conducting a meta-analysis on the corporate governance literature in China. The weight of evidence demonstrates that two major ‘good corporate governance' principles advocating board independence and managerial incentives are indeed associated with better firm performance. However, we cannot find strong support for the criticisms against CEO duality. In addition, we go beyond a static perspective (such as certain governance mechanisms are effective or ineffective) by investigating the temporal hypotheses. We reveal that over time, with the improvement in the quality of market institutions and development of financial markets, the monitoring mechanisms of the board and state ownership become more strongly related to firm performance, whereas the incentive mechanisms lose their significance. Overall, our findings advance a dynamic institution-based view by substantiating the case that institutional transitions matter for the relationship between governance mechanisms and firm performance in the second largest economy in the world.

Suggested Citation

  • Canan C. Mutlu & Marc van Essen & Mike W. Peng & Sabrina F. Saleh & Patricio Duran, 2018. "Corporate Governance in China : A Meta-Analysis," Post-Print hal-02312124, HAL.
    • Handle: RePEc:hal:journl:hal-02312124
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    Citations

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    Cited by:

    1. Ruijie Jin & Xu Jiang & Helen Wei Hu, 2023. "Internal and external CSR in China: How do women independent directors matter?," Asia Pacific Journal of Management, Springer, vol. 40(1), pages 169-204, March.
    2. Alvaro Cuervo-Cazurra & Patricio Duran & Jean-Luc Arrègle & Marc van Essen, 2023. "Host Country Politics and Internationalization," Post-Print hal-04381312, HAL.
    3. Xiaoming He & Lin Cui & Klaus E. Meyer, 2022. "How state and market logics influence firm strategy from within and outside? Evidence from Chinese financial intermediary firms," Asia Pacific Journal of Management, Springer, vol. 39(2), pages 587-614, June.
    4. Xia, Li & Gao, Shuo & Wei, Jiuchang & Ding, Qiying, 2022. "Government subsidy and corporate green innovation - Does board governance play a role?," Energy Policy, Elsevier, vol. 161(C).
    5. Angelo M. Solarino & Peter J. Buckley, 2023. "Equivalence in international business research: A three-step approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(3), pages 550-567, April.
    6. Lebedev, Sergey & Sun, Sunny Li & Markóczy, Lívia & Peng, Mike W., 2021. "Board political ties and firm internationalization," Journal of International Management, Elsevier, vol. 27(3).
    7. Davila, Jessenia & Duran, Patricio & Gómez-Mejía, Luis & Sanchez-Bueno, Maria J., 2023. "Socioemotional wealth and family firm performance: A meta-analytic integration," Journal of Family Business Strategy, Elsevier, vol. 14(2).
    8. Paul B. McGuinness & João Paulo Vieito & Mingzhu Wang, 2020. "Proactive government intervention, board gender balance, and stakeholder engagement in China and Europe," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 719-762, September.
    9. Pascual Berrone & Patricio Duran & Luis Gómez-Mejía & Pursey P M A R Heugens & Tatiana Kostova & Marc Essen, 2022. "Impact of informal institutions on the prevalence, strategy, and performance of family firms: A meta-analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 1153-1177, August.
    10. Alexandre Oliveira & Fernando Carvalho & Nuno Rosa Reis, 2022. "Institutions and Firms’ Performance: A Bibliometric Analysis and Future Research Avenues," Publications, MDPI, vol. 10(1), pages 1-20, February.
    11. Riaqa Mubeen & Dongping Han & Jaffar Abbas & Iftikhar Hussain, 2020. "The Effects of Market Competition, Capital Structure, and CEO Duality on Firm Performance: A Mediation Analysis by Incorporating the GMM Model Technique," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    12. Baorong Guo & Xinan Zhao & Lizhi Hu, 2023. "A Grounded Theory Examination of Supervisory Boards’ Governance Capability Indicators in Publicly Traded Firms: A Sustainability Perspective," Sustainability, MDPI, vol. 15(13), pages 1-17, July.
    13. Aguilera, Ruth & Duran, Patricio & Heugens, P.P.M.A.R. & Sauerwald, Steve & Turturea, Roxana & VanEssen, Marc, 2021. "State ownership, political ideology, and firm performance around the world," Journal of World Business, Elsevier, vol. 56(1).
    14. Guangfan Sun & Changwei Guo & Junchen Ye & Chaoran Ji & Nuo Xu & Hanqi Li, 2022. "How ESG Contribute to the High-Quality Development of State-Owned Enterprise in China: A Multi-Stage fsQCA Method," Sustainability, MDPI, vol. 14(23), pages 1-18, November.
    15. Achakzai, Muhammad Atif Khan & Peng, Juan, 2023. "Detecting financial statement fraud using dynamic ensemble machine learning," International Review of Financial Analysis, Elsevier, vol. 89(C).
    16. Faozi A. Almaqtari & Hamood Mohd. Al-Hattami & Khalid M. E. Al-Nuzaili & Mohammed A. Al-Bukhrani, 2020. "Corporate governance in India: A systematic review and synthesis for future research," Cogent Business & Management, Taylor & Francis Journals, vol. 7(1), pages 1803579-180, January.
    17. Maurizio La Rocca & Francesco Fasano & Tiziana La Rocca & Neha Neha, 2024. "Women in CEO duality and firm performance in Europe," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(1), pages 177-214, March.
    18. Hsu, Shufang & Lin, Shih-Wei & Chen, Wei-Peng & Huang, Jhao-Wei, 2021. "CEO duality, information costs, and firm performance," The North American Journal of Economics and Finance, Elsevier, vol. 55(C).
    19. Mike W. Peng & Joyce C. Wang & Nishant Kathuria & Jia Shen & Miranda J. Welbourne Eleazar, 2023. "Toward an institution-based paradigm," Asia Pacific Journal of Management, Springer, vol. 40(2), pages 353-382, June.
    20. Li Peng & Yuan Li & Marc Essen & Mike W. Peng, 2020. "Institutions, resources, and strategic orientations: A meta-analysis," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 499-529, June.
    21. Fan, Joseph P.H. & Yu, Xin, 2022. "Do founding families downgrade corporate governance? The roles of intra-family enforcement," Journal of Corporate Finance, Elsevier, vol. 73(C).

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