Ownership Structure, Corporate Governance, and Institutional Investors: A Case Study of Chinese Listed Companies: A Case Study of Chinese Listed Companies

Author: Qiu Jinqian
Publisher:
Publish Date: 2005-09-01
Features: The agency problems in modern public companies can be addressed through various corporate governance mechanisms, including internal governance mechanisms, managerial responsibility, constraints, and incentive mechanisms, as well as external product market mechanisms, managerial labor market mechanisms, capital market mechanisms, and securities regulatory mechanisms. The ownership structure of Chinese listed companies is dominated by concentrated equity, with state control as its primary characteristic. Therefore, the author argues that the research perspective on corporate governance in China should also shift accordingly from controlling "insider control" to regulating the behavior of controlling shareholders, with a focus on solving three key issues: first, how to transform state-controlled equity structures into institutional-controlled equity structures; second, how to constrain and supervise the behavior of controlling shareholders to reduce their exploitation of small and medium-sized shareholders; and third, how to actively leverage the role of institutional investors in corporate governance. To this end, this book proposes an "institution-led" corporate governance model.
This book employs research methods from comparative law and economics, drawing heavily on existing research findings from developed countries, to explore the fundamental corporate governance issues faced by Chinese listed companies. It also proposes corresponding recommendations based on China's actual conditions, with the aim of establishing and improving the corporate governance mechanisms of Chinese listed companies and enhancing their competitiveness.
The agency problems in modern public companies can be addressed through various corporate governance mechanisms, including internal governance mechanisms, managerial responsibility, constraints, and incentive mechanisms, as well as external product market mechanisms, managerial labor market mechanisms, capital market mechanisms, and securities regulatory mechanisms. The ownership structure of Chinese listed companies is dominated by concentrated equity, with state control as its primary characteristic. Therefore, the author argues that the research perspective on corporate governance in China should also shift accordingly from controlling "insider control" to regulating the behavior of controlling shareholders, with a focus on solving three key issues: first, how to transform state-controlled equity structures into institutional-controlled equity structures; second, how to constrain and supervise the behavior of controlling shareholders to reduce their exploitation of small and medium-sized shareholders; and third, how to actively leverage the role of institutional investors in corporate governance. To this end, this book proposes an "institution-led" corporate governance model.
This book employs research methods from comparative law and economics, drawing heavily on existing research findings from developed countries, to explore the fundamental corporate governance issues faced by Chinese listed companies. It also proposes corresponding recommendations based on China's actual conditions, with the aim of establishing and improving the corporate governance mechanisms of Chinese listed companies and enhancing their competitiveness.