Research On The Impact Of Corporate Governance On The Asset Quality Of The Listed Companies

Enterprise assets is the material foundation to the survival of an enterprise, enterprise assets quantity reflects its scale of operation, but in reality a large scale of assets does not necessarily bring high profit, and the key is the quality of enterprise assets. The pros and cons of asset quality not only affects the ability to realize profit and goal of enterprise, but also affect the enterprise's development potential, therefore, how to evaluate the quality of enterprise assets correctly and reasonably, how to help enterprises improve the quality of assets from the perspective of management is a topic worth studying. Based on the study of the previous asset quality literature found that past research more concentrated on the quality of credit assets, and the research scope is narrow, often combined with the enterprise growth and enterprise value for research, there are few scholars probing into the cause of the low quality of assets from the perspective of corporate governance. In this paper, based on the concept and characteristics of asset quality, build a comprehensive index system to evaluate the quality of the assets, provide a way to evaluate the quality of assets reasonably for the enterprise. Then conduct the thorough research to the influencing factors of the assets quality from the perspective of corporate governance, this is important for enterprises to improve asset quality and maintain sustained profitability.Existing research literature shows that asset quality in different sectors generally exhibit different characteristics, the evaluation index and influencing factors will also be different. Therefore, this article chooses the Shanghai a-share C7 manufacturing listed companies in 2011-2013 as research subjects. On the basis of previous studies, select five aspects of financial data which reflect the existence, risk, liquidity, profitability, and realizable value of assets, a total of 15 indicators to construct the evaluation index system of the assets quality. By using the Factor Analysis method to evaluate the assets quality of Sample Firms, then get the comprehensive evaluation index score. On this basis, use the multiple regression analysis method to test the impact of corporate governance on the quality of the enterprise assets. This article choose corporate governance index from three dimensions, ownership structure, board characteristics, executive incentive, including five indicators, ownership concentration, the proportion of state-owned shares, the board size, chairman and general manager whether the joining together of two jobs, executive pay. Through empirical analysis, the conclusions are as follows:(1) from the results of factor analysis, the biggest impact on the assets quality is the liquidity factor. The asset quality of Shanghai A shares manufacturing listed companies overall level is not high, and there is a declining trend year by year. The liquidity and realizable value of assets is bad. The proportion and liquidity of fixed assets in is relatively stable. The risk of assets increased in enterprise as a whole. (2) Multiple regression results show that ownership concentration, chairman and general manager of the two positions and executive compensation have a positive correlation with asset quality. The proportion of state-owned shares and board size has a negative correlation with asset quality. Based on the above analysis, this paper proposes the following recommendations:(1) Improve the ownership structure. (2) Control the size of the board. (3) Strengthen the incentive mechanism. (4) Good asset quality management work on the details.