An article co-authored by Dr. Lauren Yu-Hsin LIN, CCCL Associate Director, and Prof. Curtis J. Milhaupt, Stanford Law School, was featured on the SCCEI (Stanford Centre on China’s Economy and Institutions) China Brief on 1st November 2022. The featured brief topic is “CCCP Influence over China’s Corporate Governance”. The article, titled “Party Building or Noisy Signaling? The Contours of Political Conformity in Chinese Corporate Governance”, has been published in The Journal of Legal Studies (Jan 2021).
The article examines responses by Chinese firms to a party-building policy launched by the Chinese Communist Party (CCP) in 2015 to reform China’s state-owned enterprises (SOEs). The policy requires SOEs to follow a model template of charter amendments to formalize and elevate the role of the CCP in their corporate governance. During the period 2015–18, about 10 percent of publicly traded SOEs failed to follow the mandatory policy, while nearly 6 percent of privately-owned enterprises (POEs) complied even though they were not subject to the policy. They find wide variation in the provisions adopted within and across ownership types, with SOE adoptions apparently affected by their ownership structures and exposure to capital market forces and POE adoptions associated with political connections. Their findings highlight the complex contours of political conformity in Chinese firms and raise questions about the trajectory of Chinese corporate governance reform and foreign investment activity. The link to the featured brief can be found at: https://sccei.fsi.stanford.edu/china-briefs/ccp-and-corporate-governance
SCCEI China Briefs was established by Stanford Centre on China’s Economy and Institutions, which is Stanford’s home for empirical, multidisciplinary research on China’s economy.