Ownership Structure, Financial Policies And The Efficiency Of Corporate Governance

The relation between ownership structure and corporate governance efficiency has always been a central issue of Corporate Governance Theory. Since the 1990s when Chinese capital market became gradually mature, scholars began to pay attention to Chinese listed companies, and performed wide research on ownership structure's impact on corporate performance. However, these researches failed to find a reasonable variable to measure, comprehensively, the governance efficiency of enterprises, and often neglect the inner mechanism of such impactTo overcome the disadvantages of former researches, this paper combines knowledge from economics, financial management and corporate governance theory, and performs a deep analysis on the interaction of ownership structure, financial policies and corporate governance efficiency.At the very beginning, this paper puts forward a brand-new thesis that, even if the impact of ownership structure on corporate governance efficiency exists, such impact cannot be a direct one; it is financial policies that connect the two. These financial policies include a company's decision on capital structure, the term of debt, and the holding of current assets.We adopted a variable called "Comprehensive Scores" by factor analysis to combine 16 indexes about corporate governance efficiency. Furthermore, based on the data of Chinese electronic manufacturing listed companies, we examine several rival hypotheses concerning the relation between ownership structure and corporate governance efficiency. The result shows: there is significant, positive relationship between ownership concentration/institution share-holding percentage and a company performance; yet managers' share-holding percentage/whether the company is finally state-owned play insignificant role in corporate governance.We then study the relations between ownership structure and financial policies/financial policies and governance efficiency, and find that a company's decisions on capital structure and cash holding are the inner mechanism of ownership concentration's impact on performance.Finally, based on the former conclusions, we put forward some meaningful suggestions, in an aim to enhance the governance efficiency of Chinese listed companies.