A Study On The Impact Of Foreign Culture On Corporate Governance And Value Effect Under Institutional Context

The construction and implementation of formal institutions,such as laws,regulations and policy control,play an important role in promoting the long-term development of economic and social stability.In particular,for developing countries or transitional economies,the formal institution is the basis and guarantee for maintaining market order and promoting economic and social development,and the imperfection of the formal institution often brings great constraint on their social progress.However,while studying the influence mechanism of formal institution,we cannot ignore the importance of informal institution,such as cultural norms and religious beliefs,etc.After all,informal institution provides survival soil for the construction of formal institution,and promote the evolution of economic society in parallel with formal institution.Compared with the market economy of developed countries,the formal institutional arrangement of emerging market countries is not perfect,and the informal institution plays a more important governance role to some extent.Cultural norms are an important factor which has significant influence on corporate governance based on intrinsic motivation.Recent literatures have mainly discussed the influences of religious traditions and corrupt culture on corporate governance,indicating that cultural factors based on personal intrinsic characteristics play an important role in corporate behavior and decision-making.At present,the study of relation between culture and corporate governance is still limited both at home and abroad,the traditional culture of out country mainly influenced by Confucian culture.In the corporate operations and commercial transactions,it also shows the guanxi cultural traits.Facing the development trend of economic globalization and transnational flow of personnel,the collision and fusion of national cultural differences provide a good experimental condition to explore the mechanism between foreign culrual norms and domestic corporate governance.Based on China's overseas exchange and brain gain policy background,this paper focuses on the spreading of cultural norms and the rules and ethics rooted in heart.We make the effect of returnee directors on corporate governance as the logical line,then investigate deeply the important role cultural norms obtained by returnee directors through foreign experience and its economic consequences.This paper makes up for the lack of existing literature on the study of overseas cultural norms and corporate governance characteristics under the perspective of informal institutions.The main contents and research conclusions are as follows:Firstly,we give a comprehensive and systematic review of the frontier theories and empirical studies based on the research paradigm of "informal institution-corporate governance".Based on the knowledge of institutional economics,this paper clarifies the informal institutional factors that may affect corporate governance,and explores the mechanism and value effect of the cultural tradition of informal institutional factors on corporate governance.Then,we discuss the main cultural features in the historical process of China and overseas countries or regions(especially western developed countries)and points out the existing cultural differences.Further,it points out that in addition to technical knowledge spillover,the spread of culture also plays an important role in corporate governance,from the aspects such as cultural transmission,cultural convergence,build the theoretical analysis framework of overseas culture-corporate governance.This part not only provides Chinese scholars with research frontiers on culture and corporate governance,but also helps to sort out and construct the research framework of this paper.Secondly,this paper theoretically and empirically investigates the influence of overseas culture based on rules on the transparency of Chinese listed firms.The empirical results show that companies that employ directors with foreign background are influenced by overseas culture and have higher corporate transparency,which is manifested in higher voluntary information disclosure,more analysts' following,lower earnings forecast bias and more preference to choose Big4 audtors.Strong transparency culture has a more significant positive effect on corporate transparency.Directors' overseas cultural background acquired through their work and education experience can both significantly improve the corporate transparency.If the CEO or CFO and the members of the supervisors have overseas cultural background,the firm will have a higher level of transparency.In addition,in regions with a higher degree of marketization,overseas culture has a more significant positive effect on corporate transparency.The above research results show that overseas culture based on rules can significantly regulate China's information disclosure and improve the level of corporate transparency,and a good formal institutional environment is an important condition for ensuring and realizing the spread and convergence of overseas culture.Thirdly,this paper analyzes and tests the effects of overseas culture on the illegal and improper behaviors of listed companies in China,and discusses the effects of overseas culture,heterogeneity and types of cultural background from three aspects.The research has following results.The overseas culture based on rules has a significant restraining effect on corporate violation and misconduct.The strong rule-based culture has a more significant restraining effect on corporate violation and misconduct.The overseas educational experience of directors can significantly inhibit the company's violation,and the work experience and educational experience can significantly inhibit the company's earnings management behavior.Similarly,the better the formal institutional environment is,the more obvious the suppression effect of overseas culture on corporate violations and misconduct is.The above empirical results show that the overseas cultural background of directors plays an important role in compliance management of listed companies in China.In the case of imperfect formal institution such as legal norms and policy control,overseas culture can make up for the deficiency of formal systems and reduce the company's violations and improper behaviors.Fourthly,this paper analyzes and tests the effect of overseas culture on the fulfillment of corporate social responsibility in China,and investigates the effect of overseas culture from three aspects,respectively overall social responsibility performance,various social responsibility performance and charitable donation.Overseas culture can significantly improve the fulfillment of corporate social responsibility,which includes the responsibilities of shareholders,employees,suppliers,customers and consumers as well as environmental protection.The overseas strong social responsibility standard has the more remarkable promotion function to corporate social responsibility performance in China.The cultural norm acquired by directors' overseas work experience has only a significant positive effect on the fulfillment of corporate social responsibility,while the effect of educational experience is not significant.After endogeneity treatment with the Heckman two-stage model and propensity score matching method,the results still support the hypothesis.The above research results show that CSR is an important aspect of corporate governance and strategy implementation in China.Under the background of economic globalization,overseas culture with more normative social responsibility characteristics can provide a good reference for Chinese listed companies to fulfill their social responsibility.Fifth,this paper makes an empirical test of the economic consequences of corporate governance under the influence of overseas culture,and explores the influence channels and internal mechanism of overseas culture,corporate governance characteristics and corporate value,combined with the intermediary utility model.The empirical results show that overseas culture has a significant positive effect on corporate value.Corporate transparency,corporate irregularity and misconduct,and corporate social responsibility fulfillment play an intermediary role to some extent.That is to say,overseas culture enhances corporate value by enhancing corporate transparency,restraining corporate irregularity and misconduct,and enhancing corporate social responsibility fulfillment.Compared with the existing literature,the research in this paper may have the following innovations and contributions.Firstly,based on the system of Chinese institution,and under the framework of analysis of "informal institution-corporate governance",prior literatures mostly did research from the perspectives of Chinese traditional culture,and this paper innovatively studies from the perspective of foreign culture.The conclusions obtained from this study expand the research perspective of informal system and corporate governance,culture and corporate governanceSecondly,in this paper,we build a comprehensive system based on the characteristics of the cultural traits under the research system of Chinese listed firms.And we study from the perspective of foreign culture,heterogeneity,and foreign cultural background types,respectively from the company transparency,illegal and improper behavior,corporate social responsibility three dimensions.This,to some extent,overcomes the deficiency of existing literatures studied from a single cultural dimension and makes the research conclusion more reliable and comprehensive.Thirdly,the article closely combined with the status quo of China's institutional system,and the research conclusion has a strong application value.The conclusion of this paper not only provides theoretical support for the arrangement of the socialist system with Chinese characteristics,but also provides experience for the construction of China's new era cultural strategy and enterprise culture.