Voluntary Governance Dimension And Its Relations With Corporate Performance

In recent years, rapid economic development, especially globalization, is drivingthe improvement of capital markets, and increasing competition of the businessenvironment, the company’s capital competition will eventually embodied as itscompetition for investors. To build mutual trust and understanding with investors in ahighly competitive investment environment has become one of the important strategyof the company. Mandatory governance system through legislative and judicialreform laws and regulations in the new economic environment has been difficult tomeet the demand of investor’s right to information, the intensification of theeconomic environment changes accelerated and the problem of informationasymmetry allows the company to initiate the governance of innovation from thecompany level, namely, voluntary governance mechanisms, in order to win thecompetition for capital. As governance innovation activities carried out by listedcompany on the basis of mandatory governance, voluntary governance can optimizethe configuration of the right to information, and improve corporate transparency andstock liquidity. At same time, it can redouble the company’s reputation, reducecorporate financing costs, optimize corporate governance and ultimately realize thecompany’s value creation.So far, many domestic researchers hold voluntary governance has a positivesignificant influence on corporate performance, but voluntary governance’s influenceon corporate performance mechanism has been less researched, especially howdifferent dimensions of voluntary governance affect corporate performance, suchintrinsic mechanism, is worth further research and exploration. Therefore, thisdissertation, from the perspective of voluntary governance theory of investor relations,aims to construct the dimension factors of voluntary governance, and to exploreintermediary and mesomeric effects of voluntary governance factors to corporateperformance. The dissertation frame is as follows: it first introduces the researchbackground, and proposes the research question and its methods and innovation.Secondly, in a point of view of the investor relations, voluntary governance literature is to be reviewed, and so is the institutional background in China. Thirdly, accordingto the characteristics of voluntary governance of listed companies and the practice oflisted companies in China, combining results of theoretical studies of voluntarygovernance, the dissertation is to explore the dimension of voluntary governancestructure, and investigates the impact on corporate performance with stock liquidityas the mediating variables, as well as the influence of various dimensions of voluntarygovernance on corporate performance. Finally, the conclusions are drawn, the furtherdirection of research is recommended.The dissertation concludes as follows:From respective of the investor relations, voluntary governance consists of threemain dimensions, namely, one-way voluntary information disclosure factor, bilateralinteractive communication factor and voluntary governance organization factor.One-way voluntary information disclosure is the traditional fashion, which still playsan important role in investor relations management. Bilateral interactivecommunication is characterized as direct information exhange between the companyand investor, which shall be one of research focuses in future due to it has animportant significant impact on investor relations practice, and it should call moreattension from investor relations practitioners in listed company.As for voluntarygovernance organization factor, it is considered as the effective implementation keyto the above two factors.The stock liquidity is found to play an important intermediary role for thetwo-way interactive communication factor to affect the corporate performance. Involuntary governance, bilateral interactive communication factor will not onlydirectly affect the company’s performance, but also indirectly affect corporateperformance through the stock liquidity in capital markets, namely the existence ofincomplete intermediary effect. It is also found that stock liquidity does notsignificantly mediate relationship between one-way voluntary information disclosurefactor, voluntary governance organization factor and corporate performance.Three factors of voluntary governance are significantly related with corporateperformance even though their relation is different. One-way voluntary informationdisclosure factor and corporate performance is found to exist inverted U-shaped relationship. Bilateral interactive communication factor has a significant positivecorrelation with corporate performance. The protection factor has a significantU-shaped relationship with corporate performance.Based on the investor relations practice of voluntary governance in listedcompanies of China, this article tries to reveal the intrinsic role of different factors ofvoluntary governance on corporate performance in term of theory.Its possiblebreakthroughs can be summarized as follows,First of all, from the prospective of investor relations, the framework ofvoluntary governance has been constructed;Secondly, stock liquidity has been introduced as mediating variables to study theinfluence of the factors of voluntary governance on corporate performance, exploringthe intrinsic relationship among voluntary governance factors, stock liquidity andcorporate performance;Thirdly, it explored the direct impact of voluntary governance factors oncorporate performance, and the models were built and tested.