Empirical Research On The Impact Of Corporate Governance On Financial Performance

With the development of corporate enterprises,more and more attention has been paid to the issue of corporate governance.The relationship between corporate governance and corporate financial performance is one of the fundamental issues in modern corporate governance theory research.Electric power industry is a basic industry related to national economy and people’s livelihood,and its operating performance will have a great impact on the development of our national economy.Scholars at home and abroad have used a variety of methods from different angles to conduct a lot of research,but they have not reached a consensus conclusion,and there are not many researches on the corporate governance of such companies with natural monopoly nature and related national economy and people’s livelihood in the power industry.There are fewer policies for operability.Under the new situation,whether facing the market risk,environmental protection risk,investment risk of foreign projects,or the risk brought by the structural reform of supply side,higher requirements are put forward for the corporate governance of the power industry.The core of the modern company system is to establish a sound corporate governance structure.How to coordinate the relationship between corporate governance and corporate financial performance is an inevitable major problem for power companies to effectively cope with various risks and achieve sustainable development.In this context,this paper will take the panel data of Listed Companies in the power industry from 2014 to 2018 as the research sample.Firstly,it combs the research literature on the relationship between corporate governance and financial performance at home and abroad by using normative research methods,and launches from three main factors of corporate governance:ownership structure,board characteristics and executive compensation.Then,it uses empirical research method to explore corporate governance on finance.based on theoretical analysis to put forward hypotheses,build models and bring in data,the following analysis are taking in order:factor analysis,Descriptive statistics,correlation analysis,panel data regression analysis,mediation effect analysis,and robustness testing.Through normative research and empirical research,it is found that the governance level of Listed Companies in China’s power industry is positively correlated with financial performance,negatively correlated with the first agency cost and the first agency cost;the first type of agency costs have negative impact on corporate financial performanceand plays a full intermediary role between corporate governance level and corporate performance.the mediation effect of the second type of agency costs is not as significant as the first type of agency costs.From a theoretical point of view,since the existing literature mainly cuts in from a certain factor of corporate governance,the analysis of the governance structure and the optimization of a certain factor of the governance mechanism may be the cause of the improvement of the financial performance of the enterprise,and it is rarely analyzed from a comprehensive perspective.It also ignores the discussion of the internal mechanism of corporate governance’s role in financial performance.This paper will start from the comprehensiveness of corporate governance,comprehensively measure the level of corporate governance through factor analysis,and construct a theoretical analysis framework of"Corporate Governance-Agency Cost-Financial Performance",and analyze the internal mechanism of corporate governance on financial performance.Therefore,the research in this paper is theoretically beneficial to make up for the shortcomings of existing research,improve the theoretical system of corporate governance and its application.from the practical point of view,this study can reveal the mechanism of corporate governance on financial performance,help to clarify the fundamental position of corporate governance in the process of sustainable development of enterprises,and promote the role of decision-making and management in optimizing governance.To reexamine the transformation of enterprises and ensure the scientificity,systematicness and effectiveness of the transformation process can provide meaningful guidance and Countermeasures for the improvement and sustainable development of corporate governance in China.