Performance of Chinese Listed Companies With Respect To Ownership Structure

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TABLE OF CONTENTS

CHAPTER 02: LITERATURE REVIEW1

2.1 Introduction1

2.2 Overview of Ownership Structure1

2.3 Ownership Structure and Performance of Firms3

2.3.1 State Ownership and Firm Performance4

2.3.2 Legal Person Ownership and Firm Performance5

2.3.3 Ownership Concentration and Firm Performance6

2.4 Performance of the Chinese Stock Market7

2.5 Corporate Governance Trend and Framework12

2.5.1 Board Structure13

2.5.2 CEO Characteristics14

2.5.3 Ownership Structure16

2.5.4 Corporate Governance Index18

2.5.5 International Characteristics19

2.6 S&P 500 Effects20

2.7 Institutional Investors22

2.8 Governance25

2.9 Corporate Governance and Ownership Structure28

2.10 Corporate Governance and Executive Compensation in China30

CHAPTER 03: RESEARCH METHODOLOGY35

3.1 Introduction35

3.2 Research Method36

3.3 Research Design36

3.4 Various Research Paradigms38

3.5 Research Philosophy40

3.6 The Quantitative Research Method40

3.7 Secondary Method of Research41

3.8 Pros and Cons of Secondary Research Method43

3.9 Literature Search44

3.10 Justification for the Research Method45

3.11 Research Questions46

3.12 Hypothesis46

3.13 Variables Used for the Study49

3.14 Regression Analysis49

3.15 Sampling50

3.16 Nature of Data50

3.17 Data Collection Method51

3.18 Reliability51

3.19 Validity53

3.20 Triangulation54

3.21 Ethical Implications54

3.22 Significance55

3.23 Conclusion56

REFERENCES57

CHAPTER 02: LITERATURE REVIEW

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2.1 Introduction

This chapter of the dissertation provides literature on the performance of Chinese listed companies. It focuses on the aspects of governance in the Chinese limited companies. The literature review has enabled the researcher to familiarize with the research topic by identifying the pertinent research issues and to conceptualize the research with precision and clarity (Harper, 2001, p. 119).

The literature review is not an end in itself, but it is mean to the end of identifying issues that are worthy for a research' (Kaplan and Norton, 1992, p. 71). The literature review has been extracted from the electronic libraries, books, journals etc for meeting the purpose of this research.

2.2 Overview of Ownership Structure

All the variables that are used by LaPorta and Lo'pez (1997, p. 24) for measuring the ownership structure are based on the fraction of shares that are owned by the companies having the highest number of shareholders. They also provided maximum attention to the shareholders possessing the five largest fractions of shares owned by the shareholders. The research studies that were conducted after the article of LaPorta and Lo'pez (1997, p. 24) majorly focused on the fraction of the shares owned by the firm's management. The holdings of the management include the shares owned by the members of the board, senior management and the CEO. There has been an exclusive reliance on this measure for tracking the severity of the problems in the agency, which are suggested by all the shareholders and are classified as a common interest of the management (Harper, 2001, p. 119).

The member of the board may possess a position as he represents to be someone who has a large holding of the stock in the company (Kaplan and Norton, 1992, p. 71). The members of the board do not have the same level of interest as the professional managers. Furthermore, there interests are closely aligned with external investors. According to this research, there prevail a positive correlation between the fraction of shares which are owned by the shareholders and the fraction which is owned by the management of the organization. The positive correlation between the two variables suggested that ...