Corporate Governance And Financial Growth

Since2009, along with the development of global economy,the gem listed companieshave developed rapidly, now they have already became a bright spot in Chinese economy, andbe the backbone to promote and decide the speed and level of the national economicdevelopment.Meanwhile, under the influence of the international financial crisis, some of thegem listed companies are close to bankruptcy, some of them even died on the vine. At thesame time, there are a large part of the gem listed companies can remain stable, healthy andsustainable development momentum. This shows that the structure of corporate governance asthe basis of the listed companies’ operation, whether there is a role for the growth of the gemlisted companies, that is a worthy study. In this sense,researching the subject that corporategocernance’s influence on the enterprise financial growth has the urgency of the times,andalso has important theoretical value and practical significance.First, this paper elaborate the overseas and domestic research status about therelationship between corporate governance structure and financial growth systematically byusing the normative analysis method,then we defined the concept about the gem listedcompanies, corporate governance and enterprise financial growth, we chose theprincipal-agent theory and the enterprise life cycle theory as the basis of this study byreviewing relevant corporate governance theory and enterprise growth theory. At the sametime in this paper, econometric research such as principal component analysis is applied tocomprehensive evaluation of Chinese gem listed companies’ growth,after building a set ofgrowth index system accord with the characteristics of Chinese gem listed companies, weobtain the comprehensive ranking of growth for the selected samples.The empirical analysis is the main part of this article,on the basis of combining with thecharacteristics of Chinese capital market and the gem listed company,and considering firmsize and industry attributes,we analyse the internal relations between corporate governanceand financial growth emphatically from three aspects which are ownership structure,boardgovernance and management governance,by using the principal-agent theory. The results shows that the three dimensions of corporate governance all have different degrees of impacton corporate financial growth: in the aspect of ownership structure,the equities ratio held bythe first largest shareholder and top five shareholders both are negative related to the firmgrowth,the sum of top ten equities ratios except the largest one is positive related to thegrowth,the ratio owned by the states and the nature of the controlling shareholders do nothingto company growth;In terms of board governance, the board scale and the ratio ofindependent directors are both positive related to company growth,the professionalcommittees and the integration of power from directors and managers have no significanteffect on company growth;In management angle,the quality and the annual pay of managersboth positively relate to the growth,the equities ratio of managers has no significantpromoting effect on company growth.Finally,according to the results,this paper provides with political advice about corporategovernance which is benefit to realize Chinese gem listed companies’ sustainabledevelopment,including optimizing equity structure, strengthen board and managementgovernance, etc.