The relationship between corporate governance and corporate performance for listed companies in China

Abstract

The study examines the relationship between corporate governance and corporate performance in China using the data from listed companies over the period between 2007 and 2016. Corporate governance is measured by a variety of vectors, including CEO duality, ownership of management, board size, board meeting, and board independence. The corporate performance is measured by both ROA and Tobin’s Q. This empirical study indicates multiple relationships between corporate governance and corporate performance. First, CEO duality is positively related to corporate performance. Second, the board meeting shows an adverse impact on the firm’s performance. Third, board size has a negative relationship with the firm’s performance. Fourth, the managerial ownership, however, positively correlates to corporate performance. Overall, the corporate governance policies have impacts on the firm’s performance, and the better the firm governmental structure designed, the better the firm performed.