A Study On Corporate Governance Structure And X-Efficiency Of Securities Firms In China

Efficiency of financial institutions is an attractive problem of financial theory study.Based on corporate governance theory and X-effiency theory, this paper investigates some features of corporate governance of Chinese secureites firms,and explores the empirical relationship between secureites firms' corporate governance and X-efficiency,which is estimated using nonparametric data envelopment analysis(DEA) or parametric stochastic frontier analysis(SFA).The following conlusions have been made.(1) There are some features in internal governance of the secureites firms:concentration of ownership is very high and State-owned shares occupy a dominant proportion;board of directors and board of supervisors donot have enough independence respectively; senior managers in listed secureites firms are youthful and well-educated; salary is a prevalent incentive measure for senior management,but equity incentive mechanism is hardly applied.(2) The external governance of secureites firms is being improved,but some shortcomings still exist:relevant laws and regulations in our country donot make effective constraint to corporate governance of secureites firms;merger,acquisition and reorganization between secureites firms mainly rely on the government,not the secureites firms itself;the effect of creditor governance is not obvious; compulsive information disclosure system is imperfect.(3)There is X-inefficiency phenomena in our secureites firms and the X-efficiency estimated by using DEA and SFA is consistent at 1%level of significance.(4) X-efficiency of listed-secureites firms is significantly higher than non-listed secureites firms.Innovative-type or Normative-type secureites firms have significantly higher X-efficiency value than the others.Whether the largest shareholder is State-owned or not and whether Chairman of the Board doubles as President of the firm or not donot induce a significant difference in the X-efficiency of secureites firms.(5) X-efficiency of secureites firms has significantly negative relationship with concentration of ownership,but has non-significantly positive relationship with board size and ratio of independent directors.Larger scale secureites firms generally have higher X-efficiency, which means that asset size is an important factor for X-efficiency of secureites firms.According to the above conclusions,this paper at last makes some suggestions,such as optimizing ownership structure,enhancing the independce of board of directors and board of supervisors,improving the creditor governance mechanism and establishing a corporate governance evaluation system for secureites firms.