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Management International Review

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01.09.2009 | Research Article

The Effects of Corporate Governance and Institutional Environments on Export Behaviour in Emerging Economies

Evidence from China

verfasst von: Dr. Jiangyong Lu, Prof. Bin Xu, Prof. Xiaohui Liu

Erschienen in: Management International Review | Ausgabe 4/2009

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Abstract

This paper examines the impact of corporate governance and institutional environments on the export behaviour of firms in emerging economies. We argue that the role of corporate governance should be analysed from both principal- agent and principal-principal perspectives. We hypothesise that institutional environments moderate the effects of corporate governance on export behaviour.
Analysis of a sample of Chinese listed firms supports our argument that outside directors and CEO shareholding help firms make export decisions, while the effects of ownership concentration may be non-monotonic.
Sample firms’ export propensity is higher the better the institutional environments of their locations. This positive effect of institutional environments comes both directly and from the moderating of the effects of corporate governance.

Vorheriger Artikel Insider Control and the FDI Location Decision

Nächster Artikel Structural Reform and Firm Exports

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These two databases are the primary data sources for studying corporate governance of Chinese listed firms, which have been widely used in previous studies (e.g., Kato/Long 2006).

The CGAC database covers all export transactions conducted by Chinese exporting firms. This dataset allows us to construct measures of export propensity and export intensity of Chinese firms.

This follows the common practice of recent trade research that links firm-level data with transaction-level trade data. Bernard et al. (2007) used similar linked data to study the export behaviour of U.S. firms.

The number of listed firms in China’s two stock exchanges (Shanghai and Shenzhen) was 1,124 in 2002 and 1,381 in 2005. The number of firms that have the data needed for our study ranges from 592 in 2002 to 779 in 2005. To check the robustness of results, we also do analyses of a balanced sample which includes 590 firms that appeared in the sample for all four years. Results of the balanced sample are largely robust to that of the unbalanced sample. The results are available from the authors upon request.

For example, Lau et al. (2007) and Peng (2004) study the role of outside directors; Eisenmann (2002) and Sanders and Hambrick (2007) study the role of management shareholding.

Outside director ratios are from SinoFin Database. The Database follows China Securities Regulatory Commission (CSRC) to define board directors unaffiliated with management as independent directors, which we find more appropriate to call outside directors. It is worth noting that CSRC issued in August 2001 its Guidance Opinion on the Establishment of an Independent Director System in Listed Companies, which was viewed as ‘the most comprehensive measure taken to date by the CSRC or any Chinese governmental authority to regulate internal corporate governance through the institution of the independent directors’ (Clarke 2006, p. 129).

The number of observations in (4)–(6) in Table 2 drops to around 560 because the large majority of firms did not change export status during the sample period 2002–2005, and hence will not be included in logit models with firm-specific fixed effects.

The consistency of the GMM estimator depends on the validity of the instruments used in the regression. To address this issue we apply the Sargan Test for over-identifying restrictions, which tests the overall validity of the instruments by analyzing the moment conditions in the estimation process. For our regressions, the Sargan Test does not reject the null hypothesis that the instruments are uncorrelated with the error term. Therefore, the instruments used in the system GMM are valid.

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Titel: The Effects of Corporate Governance and Institutional Environments on Export Behaviour in Emerging Economies
Evidence from China
verfasst von: Dr. Jiangyong Lu
Prof. Bin Xu
Prof. Xiaohui Liu
Publikationsdatum: 01.09.2009
Verlag: SP Gabler Verlag
Erschienen in: Management International Review / Ausgabe 4/2009
Print ISSN: 0938-8249
Elektronische ISSN: 1861-8901
DOI: https://doi.org/10.1007/s11575-009-0004-9

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