Study On Relationship Between Corporate Governance And Performance Of China's Listed Companies In Military Industry

Since the reform and open policy, relied on the superiority of technique, the prop of national policy as well as the progressive improvement of the enterprise's management, the overall management of the military enterprise had changed thoroughly. The military enterprise has successfully realized the transformation from the planned economy system, the state-owned sole ownership management's pattern, to the market economy system, the subject of investment multiplication business model. It is an efficient path for development of the military enterprises in China to transform to joint-stock system, which developed lots of competitive enterprises. These enterprises master the international advanced technology, and have flexible management idea and strong ability of market development. But the listed companies in military industry, which are going to maintain the good corporate performances and sustained development, must establish effective corporate governance. Corporate performance is the most effective and direct reflection to measure whether the corporate governance be healthy or not. Moreover, there have no research on the corporate governance of the China's listed companies in military industry at present in China. Therefore, this paper mainly studies the relationship between corporate governance and performance of China's listed companies in military industry.The sample military enterprises this paper selected are the companies listed before 1998, which are held directly or indirectly by the 11 military groups, for investigating the relationship between all aspects of corporate governance patterns and performance.Firstly, this paper introduces the theoretical study of corporate governance structure and performance. Then, through contrasting the development models between the international military enterprises and the military enterprises in China, and the present characteristics of the listed companies' governance structure and performance, the paper reveals questions which exist in the military enterprises' development and governance structure.To analyze the relationship between corporate governance and performance of China's military listed companies, this paper embarks on three aspects which constitute the corporate governance structure: shareholders governance, board of directors governance, manager incentives. By using factor analysis method, this paper constructs the synthetical appraisement index of corporate performance. Then the paper selects the synthetical appraisement index of performance to test during the following study. It could conquer the insufficiency of using single index and simple weighted synthetical appraisement on the corporate performance. Finally, based on the results of theoretical and empirical analysis, this paper proposes some valuable suggestions which can perfect the corporate governance and enhance the efficiency of the governance.