| The abatement of coporation governane of Chinese public corporations is a recongnized fact. There are lots of arguments focuss on the ressons that cause this problem. And the other major concern of the theory of corporate governance is how to improve the institutional arrangement of firms. Unlukily, all these academic research hardly conern this problem that whether exist some essential handicaps cause the corporate governance theory disable. And it won't be effective until eliminate these handicaps. It is therefore of a substantial theoretical and practical importance, in view of the background of the increasingly integrated global product and capital markets, to perform an analysis of the corporate governance system of public companies and state companies mainly. Based on the theories of firm and property rights, the dissertation by incorporating the incomplete contract-based corporate governance theory and the empirical researches of both major international corporate governance models and the Chinese SOE reforms aims to conduct a probe for both the fundamental reasons of the corporate governance failures and possible solutions to a sound corporate governance system to be built in China, and tries to find some way to solve the corporate governance failures by improving the corporate governance structure even the handicaps havn't been removed.There are three major innovations in this paper:Firstly, this paper reveals the special ownership structure of Chinese public companies, an highly concentrated ownership structure featuring the dominance of state shares, the non-floatability of approximately two thirds of total shares, and a highly diversified ownership of floatable shares. The paper further argues that, contrary to commonly held arguments of the absence of real owners and the dominance of large state shareholders, Chinese public companies in fact have clearly defined boundaries as firms and are instead characterized by "diffused state ownership" and "same rights for different classes of shares", which lead to the corporate governance failures. Secondly, we further elaborate on the issue of "diffused state ownership" and its natural consequences of inside control and distorted principal-agent relations. In the case of inside control, the paper employs main component analysis and multiple empirical indices to survey the corporate performance and governance efficiency. As the linear regression analysis of the impact of the degree of inside control on the long term corporate governance efficiency indicates, the high degree of inside control in Chinese companies bears a negative relevance with their governance efficiency. While in the analysis of the alienation of the principal-agent relationship, the paper presents an anatomy of the "extended chain of agency" in China and the related agency costs, as exemplified in the case of state assets tunneling under the name of MBO, as the result of the "diffused state ownership". Thirdly, it is argued that, under the circumstance of "same rights for different classes of shares", controlling shareholders of public companies achieve and maintain their stakes at low costs and naturally conspire with the corporate management for private benefits, as leads to the convergence of the inside control and tunneling, a typical symptom of the corporate governance failure in China. The paper goes on to discuss the eventuality of tunneling in Chinese public companies and its measurement of private benefits gained by controlling shareholders from tunneling. Case studies and statistic data are given to further clarify the market effects of the tunneling behavior: (1). the deviation of the general financing preference of Chinese public companies from the pecking order of financ, featured by the low costs and efficiency of external financing; (2) such managerial irregularities as the appropriation by controlling shareholders, excessive related party transactions, loan guarantees, etc.; and (3) the strange observation that any form of profit distribution, whet... |
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