Institutional reforms and development of corporate governance and banking system in China

Abstract

The aim of this paper is to review China"s institutional reforms and consequent development of Chinese corporate governance system and financial system. As part of the wider economic reform initiated since the late 1970s, the Chinese government has adopted various measures aimed at reforming state owned enterprises (SOEs). These mainly include managerial autonomy, a management responsibility system, corporatization and partial privatization of former SOEs. In addition, the Chinese government took various steps to enhance the efficiency of the banking sector. The analysis shows that China"s efforts to improve the corporate sector through its own unique gradual and piecemeal approach has been successful in terms of introducing a formal governance structure for the corporate sector, liberalizing its financial sector, improving governance of state owned banks, and most importantly, developing the private sector as the back bone of the economy.

Does debt heterogeneity impact firm value? Evidence from an emerging context

“…In developing countries, previous studies find a varying relationship between tangibility and firm value. Few studies have observed a positive relationship between them (Claessens et al , 2002; King and Santor, 2008); others support negative association (Booth et al , 2001; Huang and Song, 2006), while an insignificant causality is reported by others (Ratnam and Vjayakumaran, 2017).…”

Efficiency of Working Capital Management and Firm Value: Evidence From Chinese Listed Firms

“…WCM is particularly important for firm in China, the largest emerging economy with a fast economic growth but a less developed formal financial system where firms have limited access to long-term capital markets. Unlike in developed countries, financial markets in emerging countries are underdeveloped meaning that information and agency problems are particularly pronounced (Deloof, 2003;Morck, Wolfenzon, & Yeung 2005;Dixon, Guariglia, & Vijayakumaran, 2015;Vijayakumaran & Vijayakumaran, 2017a;Vijayakumaran, 2019). Fisman and Love (2003) and Ge and Qiu (2017) show that the use of the important non-formal financial channel (e.g., trade credits) mitigates negative effects of a poorly developed formal financial system with weak creditor protection and imperfect information better than formal lenders.…”