ABSTRACT
The specific subject of enquiry in this book is corporate governance in the context of the Chinese economy, with particular reference to the companies listed on the two official stock exchanges. This is the first systematic and comprehensive study of these issues in China from a positive perspective and using econometric methods to analyse rich datasets, some of which were obtained directly from the SZSE. The main theories underpinning the book are the theory of incomplete contracts and agency theory. It is argued that the separation of ownership and control in modern corporations, and the impossibility of foreseeing, writing, and enforcing a comprehensive contract lead to agency problems. The basic argument is thus that corporate governance matters, and that it has an impact upon corporate performance.
