Canan C. Mutlu

Board interlocks and corporate performance among firms listed abroad

Purpose – This paper aims to explore the interlock-performance relationship among mainland Chinese firms listed in Hong Kong by taking advantage of a relationship-intensive context whereby such a link is likely to be especially important. Although strategic networks such as interlocking directorates have been found to affect a number of strategic behaviors, the link connecting board interlocks and corporate performance has remained ambiguous. Considerable light has been shed on the strategic networks of firms whose shares are listed abroad, which have been under-studied despite their rising importance in the global economy. Design/methodology/approach – Data come from a particularly interesting historical period – the early 1990s prior to Hong Kong’s 1997 handover to China. Both quantitative and qualitative research have been used. Findings – Empirically, it was found that good performance in an earlier period helps draw outside directors in a later period, and that network centrality and certain types of...

Corporate Governance in China: A Meta‐Analysis

How has the impact of ‘good corporate governance’ principles on firm performance changed over time in China? Amassing a database of 84 studies, 684 effect sizes, and 547,622 firm observations, we explore this important question by conducting a meta‐analysis on the corporate governance literature on China. The weight of evidence demonstrates that two major ‘good corporate governance’ principles advocating board independence and managerial incentives are indeed associated with better firm performance. However, we cannot find strong support for the criticisms against CEO duality. In addition, we go beyond a static perspective (such as certain governance mechanisms are effective or ineffective) by investigating the temporal hypotheses. We reveal that over time, with the improvement in the quality of market institutions and development of financial markets, the monitoring mechanisms of the board and state ownership become more strongly related to firm performance, whereas the incentive mechanisms lose their significance. Overall, our findings advance a dynamic institution‐based view by substantiating the case that institutional transitions matter for the relationship between governance mechanisms and firm performance in the second largest economy in the world.

Agency Theory and Corporate Governance in China: A Meta-Analysis

How has the impact of ‘good corporate governance’ principles on firm performance changed over time in China? Amassing a database of 84 studies, 684 effect sizes, and 547,622 firm observations, we explore this important question by conducting a meta‐analysis on the corporate governance literature on China. The weight of evidence demonstrates that two major ‘good corporate governance’ principles advocating board independence and managerial incentives are indeed associated with better firm performance. However, we cannot find strong support for the criticisms against CEO duality. In addition, we go beyond a static perspective (such as certain governance mechanisms are effective or ineffective) by investigating the temporal hypotheses. We reveal that over time, with the improvement in the quality of market institutions and development of financial markets, the monitoring mechanisms of the board and state ownership become more strongly related to firm performance, whereas the incentive mechanisms lose their significance. Overall, our findings advance a dynamic institution‐based view by substantiating the case that institutional transitions matter for the relationship between governance mechanisms and firm performance in the second largest economy in the world.