Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/14999
Title: Ownership structure, corporate governance, and fraud : evidence from China
Authors: Chen, G
Firth, M
Gao, DN
Rui, OM
Keywords: China's enforcement actions
Corporate governance
Fraud
Ownership
Issue Date: 2006
Publisher: Elsevier Science Bv
Source: Journal of corporate finance, 2006, v. 12, no. 3, p. 424-448 How to cite?
Journal: Journal of Corporate Finance 
Abstract: Our study examines whether ownership structure and boardroom characteristics have an effect on corporate financial fraud in China. The data come from the enforcement actions of the Chinese Securities Regulatory Commission (CSRC). The results from univariate analyses, where we compare fraud and no-fraud firms, show that ownership and board characteristics are important in explaining fraud. However, using a bivariate probit model with partial observability we demonstrate that boardroom characteristics are important, while the type of owner is less relevant. In particular, the proportion of outside directors, the number of board meetings, and the tenure of the chairman are associated with the incidence of fraud. Our findings have implications for the design of appropriate corporate governance systems for listed firms. Moreover, our results provide information that can inform policy debates within the CSRC.
URI: http://hdl.handle.net/10397/14999
ISSN: 0929-1199
DOI: 10.1016/j.jcorpfin.2005.09.002
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