Study On Corporate Governance And Corporate Performance Of Chinese Financial Listed Companies: Evaluation Model And Empirical Analysis

With the dispersion of gloable financial crisis and many financial institutions falling into financial distress, such as the five biggest investment banks in WallStreet and many commercial banks, the markert starts to rethink about the origin of this financial crisis. Except for the overage financial innovation and lost of financial supervision, imperfect corporate governance has been considered as the one of the reasons of this crisis. Although there are many researches about the relationship between corporate governance and corporate performance, there is few concern about corporate governance structure and corporate performance of Chinese financial listed companies, espesically emipircal studies.This paper studies the relatationship between corporate governance and corporate performance, based on the sample of Chinese listed financial companies, listed during years 1998-2007. This paper mainly checks the influences of ownership structure, board governance and managerial incentives to corporate performance. As for the ownership structure, this paper only concerns the effect of ownership concentration, ownership balancing degree, and ownership status to corporate performance; as for board governance, this paper mainly studies the board independence (independent directors, board size and CEO Duality) and board governance meeting(number of board meeting, number of annual shareholder's meeting and attending rate of annual shareholders'meeting); managerial incentives just reviews the relationship among managerial ownership, managerial salaries and corporate governance.Referring to ownership structure to corporate performance, this paper checks the effect of CR1, CR5, CR10, FDO and H5 to corporate performance. This paper makes use of Two Stage Leasted Suqare(TSLS) methods to check the relationship between ownership structure and corporate performance. Linear regression results indicate that, there are significant positive relation among CR1, CR5, CR10 and H5 In order to study the potential non-linear relation existed in ownership structure and corporage governance, this paper proceeds curve regression succeddently. The regression results indicate that:there are converse U relationship among CR1, CR5 and H5U。Based on the regression coefficients and restricted conditions, we can calculate the optimal ownership space。In order to check the relationship between board governance and corporate performance in Chinese financial listed companies. We mainly implement our empirical analysis from board independence and efficiency of board meeting. As for the function of board independence, we make use of propotion of independent directors, CEO duality and board size to proxy for independent degree of board. The regression results indicate that there is negative relationship between board independence and corporate performance. As for the efficiency of board meeting, we make use of number of annual board meeting, number of annual shareholder's meeting and attending rate of annual shareholder's meeting. The regression results indicate that there is negative relationship between efficiency of board meeting and corporate performance in Chinese listed companies.To check the relationship between managerial incentives and corporate performance in Chinese financial listed companies, this paper uses managerial ownership and managerial salary(adjusted by main sales revenue) to proxy for the incentive to management. The empirical analysis indicate:there is positive relationship between managerial ownership and corporate performance. In order to review the potiential curve relationship between managerial ownership and managerial salary and corporate performance, this paper proceeding corresponding cureve regressions. The emipirical study indicates:there is no curve relationship between managerial ownership and corporate performance; there is thrice curve relationship between managerial salary and corporate performance. According to regression results, we can calculate the optimal managerial salary(adjusted by main sales revenue) is 4.29%, and the worst managerial salary(adjusted by main sales revenue) is 8.6%.