The corporate governance practices and its deterministic factors in Hong Kong market

香港市場公司管治之總體表現及其決定因素

Student thesis: Master's Thesis

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Author(s)

  • Wenqun ZHOU

Related Research Unit(s)

Detail(s)

Awarding Institution
Supervisors/Advisors
  • Yong WANG (Supervisor)
  • Yan Leung Stephen CHEUNG (Supervisor)
Award date14 Jul 2006

Abstract

This dissertation aims to examine the overall corporate governance practices of listed companies in Hong Kong market, as well as to determine what factors most matter in corporate governance. Based on OECD Principle (OECD, 2004) and Code of Best Practices (HKEx, 1999), I develop a model to construct corporate governance index, in order to assess the overall corporate governance practices of Hong Kong listed companies. Relationship between corporate governance index and market value is studied to address whether investors really care about corporate governance. Furthermore, empirical analysis is also conducted to identify which factors are most important in corporate governance. The major results are as follows. (1) Corporate governance index does have positive impact on market value of listed firms. (2) Transparency and board responsibilities are the most important factors in corporate governance. (3) China-related companies perform relatively poor in corporate governance compared to Hong Kong companies. (4) Investors are more concerned with corporate governance practices of China-related companies than for Hong Kong companies. The broad and multifactor index I construct for Hong Kong listed firms is the first work in the market. It can serve as a useful reference for investors, regulators as well as listed companies themselves. The empirical evidence from a sample of 168 largest companies in Hong Kong not only confirms the importance of corporate governance, but also suggests the factors that investors most care about. These results will be useful contribution to the overall corporate governance theories.

    Research areas

  • Corporate governance, Hong Kong, China