The Impact Of Listed Companies' Coordination Of Internal And External Governance On Corporate Performance

It is known to us all that through the last two decades of development, the achievements of China's security market is obvious, the rights and interests of medium and small shareholders have been usually expropriated by large shareholders in this market, as a result, a lot of medium and small shareholders have nearly lost confidence in the security market, thus affect the healthy development of security market. While regulators continue to intensify supervision and crack down on illegal activities, and introduced a number of legal provisions to protect minority shareholders, but it is far from being a conscious act for listed companies to protect minority shareholders; the implement of the same legal provisions differs in listed companies, leading the protection of investors differs in individual companies.Legal protection of investors were divided into two levels of legislation and law enforcement, current research did not concern that in the same period of a country, as the company's external governance of the legislative and judicial situation are exactly the same, the differences in the internal governance led to different awareness of law implementation and thus have impact on corporate performance. Based on investor protection, we build an index system to measure the coordination of internal and external governance of listed companies, and collect the data sample of A-share listed companies in the period of 2005-2008 to do an empirical research on the coordination of internal and external governance of companies and corporate performance. Finally, we introduce agency costs as an intermediate variable, and do the research on the relationship of the agency costs and corporate performance, as well as coordination of internal and external governance of listed companies and agency costs.It is concluded that listed companies have gradually improved coordination of internal and external governance, but the individual differences of the coordination of internal and external governance are significant between listed companies; the coordination of internal and external governance and corporate performance are positively related, and their positive correlation are more remarkable with the strengthening of coordination. Coordination of internal and external governance of listed companies can reduce the agency costs and improve the confidence of investors, thus have positive effect on corporate performance, accordingly, improving the coordination of internal and external governance is a win-win choice for development of listed companies and investors protection.