Corporate governance in China: new perspectives and future research

Xiaofei Pan and Meijun Qian

Chapter 6 in Research Handbook on Corporate Governance in China, 2025, pp 138-155 from Edward Elgar Publishing

Abstract: A substantial amount of research has demonstrated that corporate governance is comparative, in that the conflicts of interest to be addressed and corresponding monitoring mechanisms differ across countries. The conventional corporate governance approach in the US might neither be effective nor address essential governance issues in China. This article reviews corporate finance in the context of China's economic system by focusing on four perspectives: (1) state ownership; (2) ownership concentration; (3) formal and informal institutions; and (4) dynamics between banks and markets. Overall, China's economic system produces its own governance weaknesses and resolution mechanisms. Despite advances in both formal institutions and the financial system, their role outside the listed and state sectors remains weak. Informal mechanisms remain the prevailing means of governance in the private sector and among small to medium-sized enterprises (SMEs). Future research needs to put aside Western stereotypes and misconceptions about China's business system to gain a better understanding.

Keywords: Comparative corporate governance; State ownership; Ownership concentration; Two-tier board structure; Informal mechanism; Bank and market dynamics (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035312603
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