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Empirical Study of Dynamic Chinese Corporate Governance Based on Chinese-listed Firms with A Panel VAR Approach KCI 등재
pp.5-13
Purpose – In this article, a dynamic model like a VAR is an appropriate choice for estimating the possible interrelationship between ownership structure and firm performance as a dynamic process.
Research design, data, and methodology – Data of this work are collected from Chinese stock exchange including 350 Chinese-listed firms during the period of 1999-2012. We hypothesize that this interrelationship dynamically exists between ownership structure and firm performance. To examine the correlation, a panel Vector Auto-regression (PVAR) approach generated by GMM method is utilized to test the possible dynamic relation embedded in corporate governance. Another two dynamic analysis solutions such as orthogonalized impulse-response function and variance decomposition are also used simultaneously.
Results – Findings of this study indicate the evidence that dynamically endogenous relationship exists between ownership structure and firm performance. Further, there is a dynamical correlation between investment and performance. Impulse response and variance decomposition illustrate that impact of a shock to variables themselves is the main source for their variability.
Conclusions – The conclusion in this study is that there is a bidirectional and inter-temporal effect between proportion of ownership and corporate performance for a long run in accordance with impulse response function. Overall, our results suggest that corporate governance in China is more market oriented.
1. Introduction
2. Empirical Methodology
2.1. Sample Data and Key Variables
2.2. Unit Root Test
2.3. Model Specification
2.4. Lag Length Selection
3. Empirical Results
3.1. Result of Panel VAR
3.2. Result of Impulse Response
3.4. Robustness Test
4. Conclusions
4.1. Summary
4.2. Limitations
References
