Corporate governance and tunneling: empirical evidence from China
Corporate governance and tunneling: empirical evidence from China
We analyze asset appropriation by principal shareholders in China and uncover the following relationships: (1) outsiders in the board of directors, audit without non-clean opinion, and dispersed ownership prevent operational tunneling; (2) belonging to a business group and issuing B or H share exacerbate asset appropriation. Institutional ownership does not prevent the embezzlement of assets and is endogenous, as investors select companies with good governance. Besides governance mechanisms, stock characteristics matter in that larger firms exhibit less tunneling, whereas highly leveraged firms experience the opposite. We find a decline of tunneling in 2001, which might be due to economic reforms
corporate governance, china, operational tunneling
591-605
Kling, Gerhard
feea1f9e-c49a-4d9c-b688-ec839cef9624
Gao, Lei
885f6f80-3796-4bdb-b75d-7c8905b6b5de
November 2008
Kling, Gerhard
feea1f9e-c49a-4d9c-b688-ec839cef9624
Gao, Lei
885f6f80-3796-4bdb-b75d-7c8905b6b5de
Kling, Gerhard and Gao, Lei
(2008)
Corporate governance and tunneling: empirical evidence from China.
Pacific-Basin Finance Journal, 16 (5), .
(doi:10.1016/j.pacfin.2007.09.001).
Abstract
We analyze asset appropriation by principal shareholders in China and uncover the following relationships: (1) outsiders in the board of directors, audit without non-clean opinion, and dispersed ownership prevent operational tunneling; (2) belonging to a business group and issuing B or H share exacerbate asset appropriation. Institutional ownership does not prevent the embezzlement of assets and is endogenous, as investors select companies with good governance. Besides governance mechanisms, stock characteristics matter in that larger firms exhibit less tunneling, whereas highly leveraged firms experience the opposite. We find a decline of tunneling in 2001, which might be due to economic reforms
Text
Asset_appropriation.doc
- Author's Original
Restricted to Repository staff only
More information
Published date: November 2008
Keywords:
corporate governance, china, operational tunneling
Identifiers
Local EPrints ID: 165713
URI: http://eprints.soton.ac.uk/id/eprint/165713
ISSN: 0927-538X
PURE UUID: 01594c88-8b5c-4477-b98f-dd9bf0c959c0
Catalogue record
Date deposited: 19 Oct 2010 14:35
Last modified: 14 Mar 2024 02:11
Export record
Altmetrics
Contributors
Author:
Gerhard Kling
Author:
Lei Gao
Download statistics
Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.
View more statistics