Corporate governance in China: A step forward

Stephen Y L CHEUNG*, Ping Jiang, Piman Limpaphayom, Tong Lu

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

67 Citations (Scopus)


Recently, the presumed benefits of corporate governance have become one of the most contentious issues especially for emerging markets in Asia where institutional settings are quite different from other parts of the world. Using an internationally accepted benchmark (OECD's Principles of Corporate Governance, OECD, 2004), this study evaluates the progress of corporate governance practice of Chinese listed companies. A corporate governance index (CGI) is constructed to measure the quality of corporate governance practices of the 100 largest listed firms in China during 2004-2006. The results show that Chinese companies have been making progress in the corporate governance reform. The findings also show a positive relation between market valuation and overall corporate governance practices, as measured by the CGI, among these Chinese listed companies. Additional investigation reveals that the rights of shareholders are the main driver in the relationship.

Original languageEnglish
Pages (from-to)94-123
Number of pages30
JournalEuropean Financial Management
Issue number1
Publication statusPublished - Jan 2010

Scopus Subject Areas

  • Accounting
  • Economics, Econometrics and Finance(all)

User-Defined Keywords

  • China
  • Corporate governance


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