Six understandings of corporate governance structure in the context of China

Weiying Zhang

The European Journal of Finance, 2018, vol. 24, issue 16, 1375-1387

Abstract: This paper discusses six misunderstandings about corporate governance in the context of China, particularly about the relationships between ownership and governance, between entrepreneurship and incentive, and between regulation and reputation. These misunderstandings exist not just in theoretical circles, but also in practice. The common characteristic of these misunderstandings is the distrust in the market mechanism and the neglect for the entrepreneurial spirit. Such distrust and neglect can be partly attributed to the misunderstanding of the market by the mainstream economic theories that do not take the entrepreneurs into consideration in their models. In order to have a more complete understanding of the market and corporate governance, we must transition from a manager-centered model towards an entrepreneur-centered model. We discuss the implications of this approach for public policy-making.

Date: 2018
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DOI: 10.1080/1351847X.2015.1113194

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