From Government To Corporation

Western corporate governance theory and empirical research results provethat change of control right could be viewed as a result of controlling thenon-profit-maximizing behavior of the management. In recent years, there aremany control-right shifting events happened between government agencies andprivate holders. It is an empirical issue to examine the shifting events' impacton the performance of the corporation and its corporate governance status.This paper examined the 64 samples, whose control right shifted fromgovernment agencies to private holders between 1996 and 2001. We usedmany different measuring variables to evaluate the change of accountingperformance during the events and tried to use corporate governance tointerpret these changes. The result shows that there are significant changes ofaccounting performance during the control right shifting events and they arehighly related to the changes of corporate governance. The turnover ofmanagement and the chairman and the change of the structure of the board ofdirectors are the main contributing variables.