Corporate governance in China : the role of institutional investors

The growing share of institutional investors in the capital market has increasingly brought their role in corporate governance to the fore of academic discourse.

While China is no exception in this booming trend, Chinese academia has not given the issue equal attention.

Corporate Governance in China: The Role of Institutional Investors contextualizes the assessment of the monitoring function of institutional investors in the Chinese economy using mixed research methods including interviews, secondary data analysis, and a case study.

Corporate Governance in China: The Role of Institutional Investors attempts to verify the validity of established agency theory and findings on corporate governance to China.

Noting the diverse types of institutional investors in China, author Yuan Rongli singles out financial institutions, particularly securities investment funds and securities companies, which are counterparts of “institutional investors” as traditionally understood, as she probes into the actual functioning of financial institutions in corporate governance as well as the corresponding effects on company performance.

Her study, apart from confirming the important role of these financial institution investors, identifies the factors that enhance and limit this role and the main agency problem in China’s corporate governance.