CORPORATE GOVERNANCE AND FIRM PERFORMANCE IN HONG KONG

10.6293/AQAFA.201812_16.0001

Ben K. F. Wong；Gordon Y. N. Tang

Corporate Governance ； Firm Performance ； Corporate Governance Index

Advances in Quantitative Analysis of Finance and Accounting

16期（2018 / 12 / 31）

1 - 32

英文

Hong Kong has adopted updated corporate governance (CG) rules and code of best practices in year 2005. This study aims to review and analyze if CG practices of a firm in Hong Kong have any influence on its performance as a result of these updated adoptions. This study reexamines the issue by first developing a conceptual framework and then by calculating comprehensive corporate governance index (CGI) based on the updated CG rules. The main findings are CGI, three CGI sub-indexes (namely rights of shareholders, disclosure and transparency, and board responsibilities and composition), and transparent disclosure have a significantly positive relationship with firm performance. The findings suggest that companies should spend more resources to improve those three specific CGI sub-indexes, so that the public can rely on the disclosed information to make better decisions. Besides, international investors and regulators can make reference to the results of this study. This study shows that these sample firms that also listed as American Depositary Receipts in the U.S. have significant and positive relationship with rights of shareholders.

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