Department
Management and Entrepreneurship
Document Type
Article
Publication Date
12-27-2017
Embargo Period
7-17-2020
Abstract
Do agency theory-based “good corporate governance” principles indeed apply to China? A straightforward answer to this question is lacking, because evidence is inconclusive across studies. We endeavor to fill this gap by conducting the first meta-analysis on the China literature with two focuses. First, we assess the impact of (i) board independence, (ii) board leadership structure, and (iii) managerial incentives on firm performance, as these elements have been central to both agency theory as well as to Chinese corporate governance reforms. Second, we extend current theorizing by showing support for the temporal hypothesis, which states that over time, with the improvement in the quality of market institutions and development of financial markets, the monitoring mechanisms become more important whereas the incentive mechanisms lose their significance. In conclusion, in the world’s second-largest economy, agency theory is not only applicable but is also found to be more strongly supported than in its original context.
Journal Title
Journal of Management Studies
Journal ISSN
0022-2380
Digital Object Identifier (DOI)
10.1111/joms.12331
Recommended Citation
Mutlu, Canan C.; Van Essen, Marc; Peng, Mike W.; and Saleh, Sabrina F., "Agency Theory and Corporate Governance in China: A Meta-Analysis" (2017). Faculty Publications. 4228.
https://digitalcommons.kennesaw.edu/facpubs/4228