Study On Relativity And Effectiveness Of Governance Mechanism On Chinese Listed Companies

The modern corporate governance is composed of the internal governance mechanisms relying mainly on the shareholder, the directorate and the manager and the external governance mechanisms such as the stock market, the bond market, the manager market and the product market. All these mechanisms are not independent, on the contrary, they are interrelated with one another. Because the mechanisms can promote or substitute one another, the whole corporate governance system's effect on corporate performance is not equal to the sum of each governance mechanism's effect. For the mechanisms witch can substitute each other, we need make an optimize choice by calculate the implementary cost; while for the mechanisms witch can promote each other, we need strengthen them together. Seeing about the corporate governance mechanisms systematically and correlatively is very important to the construction of modern corporate governance structure. We must focus on the key mechanisms which have a far-reaching influence on the other ones. When we import a new mechanism, we must consider if it can promote the other mechanisms or not. We must make the policy from the whole effectiveness of the corporate governance structure. In view of this, this paper enumerates the relationships among the corporate governance mechanisms as many as possible. By analyzing a sample of Chinese Listed Companies, this paper makes an empirical study on relativity and effectiveness of governance mechanisms. In the first part, we summarize the definition of corporate governance mechanism and introduce the modern corporate governance theory in brief. In the second part, we discuss the elements of various governance mechanisms and their advantage and disadvantage, especially we compare the board structure and the situation of manager stimulation in China with them in America. In the third part, we analyze the relationship among the shareholder's governance, the board's governance, the stimulation of manager, the stock market, the bond market and the manager market, etc. In the forth part, we put forward four hypotheses about the relativity and effectiveness of governance mechanisms and make an empirical study on it by 2SLS. In the last part, according to the theory analysis and the conclusion of empiricalresearch forenamed, we table some useful proposal on our construction of modern corporate governance structure through investigating the governance circumstance in our country.