Study On The Improvement Of Cross-listing On Corporate Governance Of Chinese Enterprises

Cross listing refers to the behavior of one company lists in two or more different Stock Exchange. With the development of economic globalization and increasingly open capital markets in recent years, Chinese enterprises have become increasingly frequent cross listing; not only more and more domestic enterprises listed overseas return cross listing in domestic securities market, but also domestic companies listed in the territory of our country have begun to choose to cross listing in overseas stock market. According to statistics, up to August 2014, China's realization of A + H cross-listed companies have reached 88, and 19 companies have achieved A + N cross listing. The cross listing behavior of these companies in China not only has an impact on the entire stock market, but also has a significant impact on their own governance structure.This paper selects 22 companies as samples, all of which have been cross-listed in Hong Kong SAR and mainland stock market from 2009 to 2013 five years. Then, it takes a combination of theoretical and empirical method to analyze company inside governance improvement effects for the cross listing of the company as an external mechanism, focusing on the following issues and come to conclusions:Firstly, the paper sums up the development process and the characteristics of China's cross-listed companies, compares and analyzes the two different legal system environment between Hong Kong SAR and mainland China, and concludes that the law of Hong Kong on investor protection is better than the mainland, which makes cross-listed companies face more stringent regulation in the Hong Kong SAR stock market, and will help to improve company governance.Secondly, based on the company's three internal governance indicators, namely, the board of directors, ownership structure and the executive incentive, the paper researches 22 samples for the change in the corporate governance structure before and after cross listing, and finds that cross listing has enhanced company's governance structure. Main features: Cross-listed company's board gains more independence after cross listing and heterogeneity of board members have also been enhanced, thus improving the effectiveness of Board decisions; large numbers of categories of shareholders appear, enriching the ownership structure, gave birth to generate shareholder voting system; the proportion of the controlling shareholder reduce, and ownership structure has become relatively dispersed, effectively reducing occupation of the major shareholder for the interests of minority shareholder, so to protect the interests of small investors.Thirdly, through the comparative analysis of the different influences of the two modes of cross listing---“from inside to outside” and “from outside to inside”---on the governance of listed companies, it can be found that the two modes of cross listing both have significantly improvement for the governance of listed companies, while the mode “from inside to outside” is more apparent for improving corporate governance. The conclusion has a certain inspiration for the securities regulatory authorities, public companies and securities markets.