Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/173675 
Year of Publication: 
2016
Publisher: 
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft, Kiel, Hamburg
Abstract: 
China has yet to import the corporate governance “canon” (generally accepted rules as promoting share holder value as well as minority shareholder and other stakeholders’ rights) into its Code of Corporate Governance. What effect would Chinese companies’ simply adopting such a canon – as defined by Hong Kong or other foreign corporate governance practices -- have on their share prices? We look at Mainland Chinese companies listed in Hong Kong, looking at the way their share prices react to economic fluctuations when they have better or worse corporate governance practices. Using a differences-of-differences methodology, that such share prices could/would increase by around 7% -- increasing profits by about $330 billion. Yet, a significant part of the distribution of these companies loose money in the short-run. These results provide yet another confirmation that adopting the corporate governance canon can profit companies’ investors, but not all of them.
Subjects: 
Chinese corporate governance
post-crisis economics
differences-in-differences
Hong Kong
JEL: 
G34
N25
M14
Document Type: 
Preprint

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