Principal-principal conflict in the governance of the Chinese public corporation

Yiyi Su; Dean Xu; Phillip H. Phan

doi:10.1111/j.1740-8784.2007.00090.x

Principal-principal conflict in the governance of the Chinese public corporation

Yiyi Su, Dean Xu, Phillip H. Phan

Research output: Contribution to journal › Article › peer-review

131 Scopus citations

Abstract

By examining the level of ownership concentration across firms, we determine how principal-principal conflict, defined as the incongruence of ownership goals among shareholder groups in a corporation, impacts agency costs of Chinese boards of directors. Based on data from Chinese companies listed on the Shanghai and Shenzhen stock exchanges during 1999-2003, we found that ownership concentration had a U-shaped relationship with board compensation, board size and the presence of independent directors. These results provide corroborating evidence that principal-principal conflict can lead to high agency costs.

Original language	English (US)
Pages (from-to)	17-38
Number of pages	22
Journal	Management and Organization Review
Volume	4
Issue number	1
DOIs	https://doi.org/10.1111/j.1740-8784.2007.00090.x
State	Published - Mar 2008
Externally published	Yes

Keywords

Agency costs
Board of directors
China
Ownership concentration
Principal-principal conflict

ASJC Scopus subject areas

Business and International Management
Strategy and Management

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10.1111/j.1740-8784.2007.00090.x

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AB - By examining the level of ownership concentration across firms, we determine how principal-principal conflict, defined as the incongruence of ownership goals among shareholder groups in a corporation, impacts agency costs of Chinese boards of directors. Based on data from Chinese companies listed on the Shanghai and Shenzhen stock exchanges during 1999-2003, we found that ownership concentration had a U-shaped relationship with board compensation, board size and the presence of independent directors. These results provide corroborating evidence that principal-principal conflict can lead to high agency costs.

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KW - Principal-principal conflict

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Principal-principal conflict in the governance of the Chinese public corporation

Abstract

Keywords

ASJC Scopus subject areas

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