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Principal—Principal Conflict in the Governance of the Chinese Public Corporation

Published online by Cambridge University Press:  02 February 2015

Yiyi Su ,
Dean Xu  and
Phillip H. Phan
Yiyi Su
Affiliation:
Peking University, China
Dean Xu
Affiliation:
The University of Hong Kong
Phillip H. Phan
Affiliation:
Rensselaer Polytechnic Institute, USA
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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.

Keywords

agency costsboard of directorsChinaownership concentrationprincipal–principal conflict代理成本董事会中国股权集中度所有者冲突
Type
Articles
Information
Management and Organization Review , Volume 4 , Issue 1 , March 2008 , pp. 17 - 38
Copyright
Copyright © International Association for Chinese Management Research 2008

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