Listed Corporate Governance Research, Impact On The Value Of The Company

Along with the development of securities markets, corporate governance issues increasingly become the focus of attention of market participants. The level of corporate governance standards, not only affect the operating performance of listed companies, also affected the market value of the company. It is also one of the important facts that determine the healthy and stable development of the stock market. So a growing number of scholars throw themselves into the corporate governance research.At present most research about corporate governance of listed companies and the company's value in China tend to focus on one aspect of corporate governance, such as the ownership structure, a board of directors, independent directors, management remuneration, and so on. They have not considered the impact of a series of structures and mechanisms of corporate governance on company's value in an all-round way. This paper will adopt the "Peng-yuan corporate governance rating system" to scale the level of corporate governance of listed companies, and carry on empirical researches to study the impact of the quality of corporate governance upon the company's value in China.First this paper reviews the researches about corporate governance and corporate value. Then this paper introduces the basic theory of corporate governance and analyses the status quo of corporate governance of listed companies in China. At last, this paper studies the relationship between corporate governance and company's value by theoretic and empirical analysis, using the data of listed companies from 2005 to the end of the third quarter 2007.The article finally comes to the following conclusions:1. The level of corporate governance of listed companies is positively correlated with company's value. But the positive correlation weakens when the stock market bubbles.2. Chinese investors are willing to pay a higher premium for the companies with best corporate governance. From 2005 to 2007, the companies with outstanding corporate governance of companies receive premium from 16.36% to 22.39% compare to the companies with good corporate governance, premium from 35.06% to 16.71% compare to the companies with poor corporate governance.3. China's investors have no particular preferences among good, general and poor corporate governance. The differences of Tobin's Q are not obvious among the three sorts of companies. Especially in bubble stage, the differences do not exist.4. In addition to the corporate governance, there is a positive correlation between the profitability and value of listed companies. The size of China's listed companies is negatively correlated with the value of the companies. And the growth of the listed companies is not significantly and positively correlated with the value of the companies.