The effect of corporate governance variables on share price: A comparison of “A Class” and “B Class” shares in the People's Republic of China

Kevin Jih, Simone Kelly, Raymond McNamara

Research output: Chapter in Book/Report/Conference proceedingConference contributionResearchpeer-review

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Abstract

This paper examines the interaction between corporate governance and earnings as they affect market performance. The research focuses on Chinese capital markets because of their unique characteristics with respect to elements of corporate governance. Specifically, Chinese companies may issue A-shares to Chinese citizens or B-shares to foreign investors and overseas Chinese or Chinese citizens with foreign currency. B-shares produce reports based on International Accounting Standards, have an independent board structure, and use international recognised auditor. Companies with A-shares only use Chinese Accounting Standards, do not have independent boards of directors and use Chinese auditors operating under Chinese audit standards.
The differences in governances characteristic between A-share companies and companies with AB-shares provides a useful site to test the relevance of international governance standards in a developing market. Specifically, a matched pair design using Event Study Methodology provides a comparison between the market responses to an earnings announcement where differences in governance practices exist.
The results indicate that the Chinese stock markets were segmented before the relaxation of restrictions on purchase of B-shares by domestic investors in 2001 and they remained segmented after the regulation change in 2001. Accordingly, the analysis of governance impacts was assessed in these two segments.
Original languageEnglish
Title of host publicationProceedings of the 23rd Asian Pacific on International Accounting Issues
EditorsA Peyvandi
Place of PublicationFresno
PublisherAsian-Pacific Conference
Pages1-39
Number of pages39
Publication statusPublished - 2011
EventAsian-Pacific Conference on International Accounting Issues - Beijing, China, Beijing, China
Duration: 16 Oct 201119 Oct 2011
Conference number: 23rd
https://www.apconference.org/

Conference

ConferenceAsian-Pacific Conference on International Accounting Issues
Abbreviated titleAPC Conference
CountryChina
CityBeijing
Period16/10/1119/10/11
Internet address

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Corporate governance
Governance
China
Share prices
Auditors
Foreign investors
Investors
Capital markets
Board of directors
Foreign currency
Interaction
Accounting standards
Audit
Earnings announcements
Event study methodology
Chinese accounting
Market performance
Chinese stock market
Market response
Board structure

Cite this

Jih, K., Kelly, S., & McNamara, R. (2011). The effect of corporate governance variables on share price: A comparison of “A Class” and “B Class” shares in the People's Republic of China. In A. Peyvandi (Ed.), Proceedings of the 23rd Asian Pacific on International Accounting Issues (pp. 1-39). Fresno: Asian-Pacific Conference.
Jih, Kevin ; Kelly, Simone ; McNamara, Raymond. / The effect of corporate governance variables on share price: A comparison of “A Class” and “B Class” shares in the People's Republic of China. Proceedings of the 23rd Asian Pacific on International Accounting Issues. editor / A Peyvandi. Fresno : Asian-Pacific Conference, 2011. pp. 1-39
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Jih, K, Kelly, S & McNamara, R 2011, The effect of corporate governance variables on share price: A comparison of “A Class” and “B Class” shares in the People's Republic of China. in A Peyvandi (ed.), Proceedings of the 23rd Asian Pacific on International Accounting Issues. Asian-Pacific Conference, Fresno, pp. 1-39, Asian-Pacific Conference on International Accounting Issues, Beijing, China, 16/10/11.

The effect of corporate governance variables on share price: A comparison of “A Class” and “B Class” shares in the People's Republic of China. / Jih, Kevin; Kelly, Simone; McNamara, Raymond.

Proceedings of the 23rd Asian Pacific on International Accounting Issues. ed. / A Peyvandi. Fresno : Asian-Pacific Conference, 2011. p. 1-39.

Research output: Chapter in Book/Report/Conference proceedingConference contributionResearchpeer-review

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Jih K, Kelly S, McNamara R. The effect of corporate governance variables on share price: A comparison of “A Class” and “B Class” shares in the People's Republic of China. In Peyvandi A, editor, Proceedings of the 23rd Asian Pacific on International Accounting Issues. Fresno: Asian-Pacific Conference. 2011. p. 1-39