Research Of The Corporate Governance Effect On The Delisting Of Chinese Listed Companies

Since Shanghai Stock Exchange and Shenzhen Stock Exchange was established in1990, Chinese economy and the reform of the state-owned companies have been greatly promoted by the stock market. However, it took over100years for the western countries developing their capital market. Less than thirty years’ development of stock market brought China prosperity and lots of problems in the same time. Recently, academics at home and abroad pay more focus on corporate governance. Chinese companies’ corporate governance also have a lot of space to improve.This paper focuses on the Chinese listed companies’ corporate governance, it aims to find out if the corporate governance can affect the companies’ delisting risk and how it affects. Firstly, the paper gives out the literatures related about the delisting and corporate governance. Secondly, the research elaborates on the basic theories of this paper, focusing on the development of the delisting system, the features of delisted companies, corporate governance patterns and current situation of corporate governance in China. Thirdly, construct empirical models, univariate model and multivariate probit model. Proposed4testable hypotheses from4aspects of corporate governance, namely board of directors characteristics, board of supervisors characteristics, stock rights characteristics and outside auditors. Filter36listed companies as the control sample of the36delisted companies, use these companies’ data to testify the4hypotheses.The research shows:(1) The outside directors ratio, the dual appointment of chairman and CEO, the top1, the proportion of shares held by the government and the frequency of changing outside auditors have significant impacts on the delisting risk.(2) The meeting times of the directors, top10and the proportion of shares held by foreign stockholders can also affect the companies’ operations, but the impact is insignificant.(3) The board of directors and the board of supervisors of Chinese companies, especially for the SME, are integrate in form but no avail in their responsibility. Therefore, under the current situation, securities regulators, listed companies and investors should take full advantage of the prominent corporate factors. The securities regulators should perfect the related regulations. Listed companies and investors ought to pay more attention on the corporate governance’s functions, to decrease the risk of delisting, to protect the investors’ benefit and guarantee companies long-term development.