Bankers in the Boardroom and Firm Performance in China

Qing He (First Author), Oliver Meng Rui (Participant Author), Chenqi Zhu (Participant Author)

Research output: Contribution to journalJournal

1 Citation (Web of Science)

Abstract

We use a dataset comprising the appointments of commercial bankers as board of directors at Chinese listed firms and find that financially distressed firms are more likely to recruit a commercial banker as a director of the board. The presence of a banker on the board increases access to bank loans, yet many investors react negatively to announcements of such appointments. We also find that such appointments are typically followed by a drop in the appointing firm's operating performance, and an increase in rent-seeking activities. This suggests that bank directors cannot strengthen corporate governance. Most financial resources are expropriated by corporate insiders.
Original languageEnglish
Pages (from-to)1850-1875
JournalEmerging Markets Finance and Trade
Volume52
Issue number8
DOIs
Publication statusPublished - 2016

Corresponding author email

qinghe@ruc.edu.cn

Project name

累积投票制度与投资者保护:基于中国上市公司的研究

Project sponsor

国家自然科学基金

Project No.

71402181

Keywords

  • ACCESS
  • AGENCY COSTS
  • China
  • DEBT
  • DETERMINANTS
  • FINANCE
  • HONG-KONG
  • INVESTMENT
  • LOANS
  • OWNERSHIP
  • PARTY TRANSACTIONS
  • bankers
  • corporate governance
  • firm value

Indexed by

  • ABDC-B
  • Scopus
  • SSCI

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