Empirical Researches For Listed Chinese GEM Companies On The Relationship Between Corporate Governance And Corporate Value

The corporate governance movement began in the1990s.After20years of development, the research focus on the macro-level governance principles change into the micro-level governance practices. The relationship between corporate governance and the value of listed companies also begen to attract the attention of scholars, theorists and practitioners.Based on the evidence from SMEs in the GEM Listing, this paper reviews the relationship between the SME corporate governance and the value of listed companies in the Chinese context, which focuse on two aspects of corporate governance that include the ownership structure and board characteristics. Using the listed companies’ market value as the measure of the company value, we try to find the judgment and identity of the market for Corporate governance of small and medium enterprises, thus propose some reasonably and practicable recommendations which could be beneficial to improve the governance of listed companies for SMEs.By means of introducing historical evolution of corporation theory, this thesis takes theory of transaction cost theory, signaling theory and stakeholder theory as theoretical foundations for corporate governance. The study analysis the governance of listed companies in both ownership structure and the board characteristics. The independent variables of the shareholding structure include ownership concentration, stock checks and balances, the nature of the controlling shareholder, the holdings of the board and the holdings of managers. The independent variables of the board characteristics include board size, the proportion of shareholding directors, independence, and the board director holding a CEO concurrently.By December31,2011, there are286SMEs in the GEM listing. Removing some non-conforming samples we obtained253valid samples. According to the analysis and processing of these sample data, the assumption of this article is verified. Three assumptions of the relation between managerial Ownership, board size and the proportion of shareholding directors and the value of listed companies are verified. In addition two assumptions about the relation of the value of the company is significantly correlated, but the results are inconsistent with our assumption. The relation between the check and balance,the equity stake of the board of directors and the value of the listed companies is negative.According to the results of data analysis, the article discusses subsequently and draws seven conclusions. This paper attempts to put forward some rationalization and the feasibility of proposals. China’s capital market is still in the initial stage that the increase in the number but quality without increasing. The participation of venture capital in listed companies does not provide full certification and not increase the investors’identity of the value of listed companies. In addition, plans of stock option of managers and key employees can become a better corporate governance, incentive and restraint mechanisms. The measure which in exert function of board oversight and decision-making remains to be in-depth study.