An Empirical Research On The Relationship Between Power Configuration And Corporate Performance Based On The Access Right Theory The Firm

The ownership of physical assets is not necessarily the most effective incentivemechanism in promoting relationship-specific in the context of incomplete contract.On the contrary, the right to access can somehow stimulate specific investment, whichis sort of different from traditional viewpoint of property right of the firm, particularlythe human capital specific-relationship investment. Since the amount of surplus thatthe agent gets from this power is often more contingent on her making the rightspecific investment than the surplus that comes from ownership. Therefore, if sheinvests nothing, she will get nothing in the future, access can be a better mechanismto provide incentives than ownership, so access is superior to ownership in providingincentive to invest.Above all I summarize some underlying theories, namely, agent theory,stakeholder theory, incomplete contract theory and access right theory of the firm inthe framework of corporate governance. In this paper I select three importantdimensions, namely, CEO tenure, CEO turnover and Equity incentive to act on behalfof access right to identify the impact on the corporate governance performance. Iselect473listed companies in the manufacture industry, which includes108Shenzhen Stock Exchange listed companies and365Shanghai Stock Exchange listedcompanies, using the financial reports as the resource of data in the2010fiscal year.By conducting correlation and partial correlation analysis and multiple linear regression analysis, I showcase that the relationship between CEO Tenure andcorporate performance presents a down U shape, CEO Turnover and corporateperformance presents a negative relation, Executive Equity Incentive presents apositive relation, all of our three hypothesis are testified. Our result bring intocorrespondence with previous researches. However, due to present only a smallproportion of listed companies in the manufacture industry implement the executiveequity incentive, which finally leads to insignificant effect on corporate performance.In the last section of my study I propose some feasible suggestions based on myresult from this paper and point the possible way for future study. Through my studywe can find that in some cases access can be a superior and complementarymechanism to ownership. Human capital specific-relationship investment grants theagent the right to have a claim to the firm for future organization rents and surplus,but this kind of power does not follow the power resulted from physical assetsownership, in fact, they can coexist, they are both mechanism for corporatemechanism, access does not deny the traditional property right theory of the firm,rather than it is an effective complementary mechanism and develops the theory ofthe firm to a further extent.Based on my research I propose my research suggestions for future study,mainly includes to improve the executive equity incentive schemes, to build effectiveinformation channel. To strengthen executive in position trainings in our listedcompanies in China, build an information database for the professional managers, toimprove managerial mechanism accordingly, to perfect the corporate governance, tostrengthen outside monitor to the firm.