Corporate Governance: International Practice And China's Option

According to the logic of " Finance Model-Capital Structure-Model of Corporate Governance" , the model of corporate governance is the derivative of the finance model, which results that there exists distinctive difference between models of corporate governance under the markets-oriented system and the banking-oriented systems respectively. In addition, with the analytical framework of SCP, we can further conclude that the model of corporate governance sets the economic performance. As a result, a puzzle naturally arises: does the optimum model of corporate governance exist? If yes, then what is it? In different phases of development, the Germany-Japan model and the UK-US model dominated each other, due to the fact that one outperformed another. However, to date it has not been found that one model dominates the other overwhelmingly, neither based on theoretical analysis or on empirical data. Therefore, to adopt which model of corporate governance and finance is of a matter of ideology ultimately.The Germany-Japan model and the UK-US model, to some extent, has shared the same trend of development in common ever since 1990s, which we should conform to while introducing the objective model of corporate governance in a bid to boast advantages of different models, as like the excessive use of some corporate governance mechanism even exerts negative impacts on the financial performance of firms, because the marginal effect of some corporate governance mechanism declines, thus the optimum mechanism must be the mix of different mechanisms. Of course, due to the path dependence effect, we should take into account the specialties of various factors, such as culture and customs, law systems, etc., while introducing the optimum model of corporate governance.As a result, the article compares the characteristics of the two typical models of corporate governance and analyses the merging trend of them, adopting the framework of comparative finance and from the perspective of corporate governance,in a bid to contribute to the adoption of the objective model. The article is arranged as follows: the introduction briefly introduces the background of the article and where the relevant research is; the 1st chapter concentrates efforts on the basic concepts of corporate governance, including what the corporate governance is and what it comprises; the 2nd chapter compares the two typical paradigms of corporate governance, focusing on comparison of the characteristics and strengths/weakness of them; the 3rdchapter introduces the merging trend of models of corporate governance worldwide, both from the interior and exterior aspects of them; the 4th chapter analyses the status quo of corporate governance in China with the listed firms as examples, theoretically and empirically, conducive to the rational adoption of the objective model of corporate governance; the 5th chapter, based on the analysis mentioned above, examines the optimum model of corporate governance available and the nurture of its foundation; the 6th chapter ends the article, further examining the approaches to the optimum model of corporate governance for China.