Corporate Governance in China

Paper Summary:

This paper points out the necessity of exploring the effectiveness of current corporate government in China. The paper explores the problems that currently exist and their effects on the economy. The paper aims to be a solution-based research that seeks to make recommendations as to legislation and internal control mechanisms that will be useful in maintaining acceptable standards of corporate governance in China's future.

Outline:
Literature Review
Corporate Governance and Valuation
State vs. Private Ownership
Investor Protection
Methodology
Conclusion

From the Paper:

"The literature review revealed that some attention has been paid to corporate governance and its effects on competitiveness and firm trustworthiness as far as investors are concerned. However, it also revealed that regionalization due to an inferior infrastructure plays a significant role in the inability to apply uniform laws. Several important factors were revealed that may serve as metrics for the current study. For instance, executive salaries were found to be directly linked to firm performance in state-owned enterprises. A significant difference exists between private enterprise and state-owned enterprise. This will have to be addressed as well. Now let us examine an overview of the methodology that will be used to explore these research issues. "

Sample of Sources Used:

• Amiti, M. and Smarzynska J. (2005). "Trade Costs and Location of Foreign Firms in China," CEPR Discussion Papers. 4978.
• Bai, C., Liu, Q., Lu, J., Song, F., and Zhang, J. (2004). Corporate governance and market valuation in China. Journal of Comparative Economics. 32 (4): 599-616.
• Bai, C., Li, D., Tao, Z., and Wang, Y. (2000). "A Multitask Theory of State Enterprise Reform," Journal of Comparative Economics, Elsevier. 28(4): 716-738.
• Chong-En, Bai., Yingjuan, Du., Zhigang, T., and Tong, S. (2003). "Local Protectionism and Regional Specialization: Evidence from China's Industries," William Davidson Institute Working Papers Series 2003-565, William Davidson Institute at the University of Michigan Stephen M. Ross Business School.
• Claessens, S., Djankov, S., and Lang, L. (2000). "The separation of ownership and control in East Asian Corporations," Journal of Financial Economics, 58(1-2): 81-112

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