ساختار مالکیت، حاکمیت شرکتی و کارایی سرمایه گذاری شرکت های چین Ownership structure, corporate governance and investment efficiency of Chinese listed firms

1. Introduction This study investigates whether and how ownership structure (i.e. ownership concentration, managerial ownership and incentive-based compensation) and both internal (i.e. boardroom characteristics) and external governance mechanisms (i.e. institutional investors, auditor reputation) influence the investment efficiency of Chinese listed firms. This topic has remained unexplored. Investment efficiency deals with how well firms invest their assets. It can be used as a measure of firm performance in the sense that higher investment efficiency signifies more effective use of assets and, in turn, better firm performance. Investment efficiency is a fundamental concern in corporate finance, especially for Chinese listed firms, because most of them are ultimately controlled by the government. To date, state-owned enterprises (SOEs) still dominate the Chinese stock markets. Top executives of SOEs are appointed under heavy influence of the respective government, and their career changes are dominated by parent SOEs or controlling state entities (Huang et al., 2011). As such, top executives of SOEs are more likely to pursue politically motivated goals for their own interests rather than higher investment efficiency (Huang et al., 2011). Chen et al. (2011) also find that political connections have a negative impact on the investment efficiency of Chinese listed firms. Therefore, it is worthwhile to investigate whether any improvement in corporate governance mechanisms increases investment efficiency for SOEs as opposed to private firms. The Chinese Government has embarked upon various reforms to improve corporate governance and protect the interests of minority shareholders of listed firms, and most reforms are based on best practices in the USA and other developed nations (Chen and Zhang, 2012; Ding et al., 2007). For example, mutual funds were introduced to domestic stock markets in the late 1990s by the Chinese Securities Regulatory Commission (CSRC). In 2002, the CSRC further required all listed firms to have at least one-third of the board members be independent directors. Moreover, the CSRC have been encouraging publicly listed firms to provide incentive-based compensation to managers, and listed firms have started to grant stock options and restricted stock to their CEOs since 2005.