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Journal of Business Ethics

, Volume 134, Issue 4, pp 575–592 | Cite as

Is Corporate Governance in China Related to Performance Persistence?

  • Lars Helge Haß
  • Sofia Johan
  • Denis SchweizerEmail author
Article

Abstract

This paper examines the relationship between performance persistence and corporate governance (as proxied for by board characteristics and shareholder structure). We document systematic differences in performance persistence across listed companies in China during 2001–2011, and empirically demonstrate that firms with better corporate governance show higher performance persistence. The results are robust over both the short and long terms. We also find that performance persistence is an important factor in refinancing, and it can lower companies’ costs of borrowing. Overall, our findings offer important implications for business ethics, as we demonstrate how corporate governance can lower companies’ costs of debt.

Keywords

Board structure China Corporate governance Performance persistence 

Notes

Acknowledgments

The authors are grateful to an anonymous referee for their many helpful comments, and the special issue editors Douglas Cumming, Wenxuan Hou, and Edward Lee for very useful suggestions. The authors gratefully acknowledge valuable feedback from the participants at the Conference on Sustainable and Ethical Entrepreneurship, Corporate Finance and Governance, and Institutional Reform in China. Helpful comments were further provided by Martin Conyon, Joseph P.H. Fan, Kenneth Kim, and Juliane Proelss.

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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Lars Helge Haß
    • 1
  • Sofia Johan
    • 2
    • 4
  • Denis Schweizer
    • 3
    • 5
    Email author
  1. 1.Lancaster University Management SchoolLancaster UniversityLancasterUK
  2. 2.York University—Schulich School of BusinessTorontoCanada
  3. 3.Concordia UniversityMontrealCanada
  4. 4.Tilburg Law and Economics CenterTilburgThe Netherlands
  5. 5.WHU—Otto Beisheim School of ManagementVallendarGermany

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