The Correlation Research On Allocation Structure Of Two Power And Firm Performance

Corporate governance originated in the1930s. This subject has arosen widelyattention since its appearance. There are two reasons behind this, one reason for this isthat corporate governance has the strong economic theory foundation, and the other isthat the conclusion of the study provides theory support and guidance for managementand administration of the listed company at home and abroad.The domestic and foreign scholars mainly focus on the research of corporategovernance mechanism. Corporate governance mechanism is divided in two parts:internal corporate governance mechanism and exterior corporate governancemechanism. Internal corporate governance mechanism includes board structure,incentive mechanism, ownership structure and so on. Exterior corporate governancemechanism includes legal mechanism, market for corporate control, supervisioninstitution and so on. Compared with exterior corporate governance mechanism,internal corporate governance mechanism has more maneuverability andcontrollability. What is the more important, it has more practical significance inbehavior of listed companies. What kind of corporate governance mechanism canimprove efficiency of corporate governance? Which variable can measure firmperformance? How does the selected corporate governance mechanism affect the firmperformance? All of these questions need to be solved.In this paper, we selected172listed companies from the manufacturing industryas a sample. From the perspective of matching degree between residual Manipulationand residual claim, we constructed an empirical study model which based on dynamicendogeneity. We constructed a new indicator to measure firm performance, which iscalled Corporate Governance Surplus (CGS). This new indicator played a veryimportant role in the whole thesis. The conclusions were got as following: the highermatching degree between residual Manipulation and residual claim a listed companyholds, the better firm performance a listed company will achieve; when the listedcompany doesn’t hold the matching degree between residual Manipulation andresidual claim, the proportions of the executive director and managerial ownership aresignificantly related to the firm performance. In addition, in this paper by comparing the results from the different estimate methods, including Ordinary LeastSquares(OLS), Two Stage Least Squares(TSLS) and Generalized Method ofMoments(GMM), we found that GMM has unique advantages in dealing with thedynamic endogeneity related to Corporate Governance. Then we summarized thelimitations in this paper and proposed a new perspective——tax management on thestudy of corporate governance.