The Status And Effecting Factors Of Implementation Of General Principles Of Corporation Finance

The new edition of General Principles of Corporation Finance was introduced on January 1,2007, which was researched on by the academia only on the level of interpretation. This paper shows the situation of the Principles' implementation by the empirical method, for the regulators to realize the problems in the implementation. Further, the factors of the implementation result are also discussed in this paper to offer some solutions adapted to above problems.Based on the theory of property rights, "property rights" in this paper is defined as financial control rights. From this, it is considered that the essence of corporate financial system is either how to externalize and standardize the arrangement of property rights belonging to corporate, or the embodiment of the will of the financial system designers-corporate owners and managers, all of which determine whether the Principles are justifiable. According to the Principles, a template of corporate financial system is designed as the basis for empirical research. After the empirical analysis of 225 State-owned listed companies and 95 listed companies which disclosed corporate financial system voluntarily, it is indicated that the implementation of the Principles is not ideal. The result of this research shows that on implementation of the Principles, the large companies are better than the small companies, and companies listed at Shanghai Stock Exchange is better than those listed at Shenzhen Stock Exchange. And the level of the perfection of corporate financial system is either significant negatively correlated with profitability of financial system, or negatively correlated with the frequency of Board of Directors conferences but not significant, all of which is also indicated from the research result. For further implementing the Principles, some suggestions are given by analyzing the implementation and factors of the Principles.