A Study On The Governance Structure And Performance Of Chinese Bond-type Fund Firms

Securities investment fund is an important participant in the securities market, and its sound development will have profound impact on that of the latter. Looking back at the development history of Chinese securities investment funds especially in recent ten years, with active government promotion,securities investment funds have undergone rapid expansion in size along with the constant occurrence of inside stories as well as pool operations and illegal behaviors. Analysis shows that the fundamental cause for such problems is that there exist weaknesses in the governance structure of Chinese securities investment funds.This paper, centering on securities investment fund and performance, employs some ideas and methods of corporate governance to deal with issues facing governance structure of Chinese bond-type funds. First, it theoretically elaborates the interests-based relations between and orientations of various behavioral agents of fund performance, fund governance structure as well as bond-type funds, points out the necessity for improving the governance structure of securities investment funds, and on such basis analyses the problems that exist in the governance structure of Chinese bond-type funds. Then, it selects 54 Chinese closed-end funds during 2002-2008 as samples, using Multiple Linear Regression to empirically study the relations between bond-type fund governance structure and performance, and quantitatively compares various key governance structure factors that affect the performance of securities investment funds so as to seek the orientation for improvement in governance structure. Next, by comparing the four governance structure patterns typical of international securities investment funds, it summarizes some of their strengths that merit reference. Finally, based on the above theoretical analysis and empirical study results, considering the current problems with Chinese bond-type funds and drawing on the strengths of international securities investment funds, this paper provides pertinently several suggestions including the improvement of voting right agency system and independent director systems etc.