Three Essays On Corporate Governance In China

Being one of the largest economies,China still has diverse institutional and governance structure as compared to developed economies.Therefore,the purpose of this study is to investigate the interesting yet unexplored phenomenon of agency problem in the context of Chinese listed firms.In particular,this study integrates three different still interconnected domains of corporate governance pertaining to the agency problems in Chinese firms.First,we check the relationship between corporate diversification and CEO compensation and how ownership structure and CEO political connection alter such relationship using the data of Chinese listed firms over the period of 2008 to 2014.The empirical findings of the study suggest that corporate diversification has a positive and significant impact on CEO compensation.In addition,the positive and significant relationship between corporate diversification and CEO compensation is more pronounced in non-state and politically connected firms relative to state-owned and politically non-connected firms.Second,we analyze the impact of corporate diversification on CSR and the moderating role of state ownership in this nexus.By collecting the data from 2011 to 2014,the empirical findings show that corporate diversification positively affects CSR performance.Furthermore,the results also suggest that state-owned firms in China are mainly focus on non-financial objectives as state ownership further enhances the positive relationship between corporate diversification and CSR.Third,we analyze the impact of CSR on stock price crash risk over the period of 2009 to 2014.The findings reveal that the negative effect of CSR ratings is more prominent in firms with female-driven and independent boards.Moreover,this relationship varies across different level of CEO compensation.In addition to this,the mitigating influence of CSR ratings on stock price crash risk is found to be more significant in distressed firms in comparison to potential distressed and healthy firms(which were segregated by using Altman Z-Score designed for the Chinese market).The study controls for potential endogeneity,self-selection biasness and provides robust results.The study also offers recommendations and future directions in relevance to the governance mechanisms and these three outcomes.