Interaction Effects of Governance Systems and Non-state Ownership on the Performance of Chinese Corporations

This study aims to investigate recent changes in the ownership structures and governance systems of listed Chinese corporations and their effects on the performance of these corporations since the corporate reforms of 1999. A set of hypotheses on the interaction effects between non-state ownership and governance systems is tested empirically by using multiple regression analysis of a seven-year (2002-2008) sample of listed Chinese corporations in the IT-service and transport-storage industries. The results indicate that corporate governance systems and non-state ownership structures interactively influence the performance of such corporations. They imply that recent corporatization reforms in China have progressed the governance systems of Chinese corporations although their impacts somewhat differ from those in the case of developed countries. Therefore, policy makers should develop tailored systems that are conducive to effective corporate governance systems in China. Furthermore, the effectiveness of governance systems in Chinese corporations must be evaluated in light of the characteristics of the ownership structures of these corporations.