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- W3125206964 abstract "Manuscript Type Empirical Research Question/Issue Direct transfer (Type I tunneling) means that the controlling shareholders transfer resources from the firm for their own benefit. This study aims to investigate the impact of internal and external governance mechanisms from the perspective of principal-principal (P-P) conflicts on Type I tunneling. Research Findings/Insights Using hand-collected data comprising 117 Chinese listed companies with 540 firm-year observations during 2001–2005, the results show that state ownership and the number of board of directors' meetings are positively correlated with Type I tunneling, whereas the number of independent directors reveals a negative association. Other internal governance mechanisms including foreign ownership, the size of the board of directors, supervisory board size, number of professional supervisors, and the number of supervisory board meetings were found to have no impact. Theoretical/Academic Implications Several implications can be drawn. First, this study has modeled tunneling using a well-accepted theoretical perspective – agency theory of P-P conflicts. But the results show that agency theory does not appropriately explain tunneling behavior in China and so institutional theory is suggested as an alternative theoretical perspective for future research. Second, corporate governance reforms relating to supervisory boards have not been sufficient to ensure that they properly fulfill their role of oversight. Rather, such supervisory boards are perhaps playing more of a “rubber stamp” role. Practitioner/Policy Implications This study recommends prescribing the legal responsibilities and obligations for two-tier boards in the Chinese context, allowing them to undertake their duties diligently." @default.
- W3125206964 created "2021-02-01" @default.
- W3125206964 creator A5088599693 @default.
- W3125206964 date "2013-03-11" @default.
- W3125206964 modified "2023-10-01" @default.
- W3125206964 title "Can Internal Governance Mechanisms Prevent Asset Appropriation? Examination of Type I Tunneling in China" @default.
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- W3125206964 doi "https://doi.org/10.1111/corg.12022" @default.
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