A Dynamic Estimation of Board Efficiency Index and Financial Performance: Evidence from China

Adjaoud, F., Zeghal, D. and Andaleeb, S. (2007), “The Effect of Board’s Quality on Performance: a study of Canadian firms”, Corporate Governance: An International Review, Vol. 15 No. 4, pp. 623–635, doi: 10.1111/j.1467-8683.2007.00592.x.
Ahmed, F. and Hussainey, K. (2023), “A bibliometric analysis of political connections literature”, Review of Accounting and Finance, Emerald Publishing Limited, Vol. 22 No. 2, pp. 206–226, doi: 10.1108/RAF-11-2022-0306.
Alshdaifat, S. M., Abdul, H. M. A., Ab, A. N. H., Saidin, S. F., and Alhasnawi, M. Y. (2024), “Corporate governance effectiveness and firm performance in global crisis: evidence from GCC countries”, Corporate Governance: The International Journal of Business in Society, Vol. ahead-of-print No. ahead-of-print, doi: 10.1108/CG-12-2023-0518.
Amadi, C., Ode-Ichakpa, I., Guo, W., Thomas, R. and Dimopoulus, C. (2023), “Gender diversity as a CSR tool and financial performance in China”, Cogent Business & Management, Cogent OA, Vol. 10 No. 2, p. 2207695, doi: 10.1080/23311975.2023.2207695.
Arora, A., and Bodhanwala, S. (2018), “Relationship between Corporate Governance Index and Firm Performance: Indian Evidence”, Global Business Review, Vol. 19 No. 3, pp. 675–689, doi: 10.1177/0972150917713812.
Brahma, S., Zhang, J., Boateng, A., and Nwafor, C. (2023), “Political connection and M&A performance: Evidence from China”, International Review of Economics & Finance, Vol. 85, pp. 372–389, doi: 10.1016/j.iref.2023.01.026.
Brick, I. E., and Chidambaran, N. K. (2010), “Board meetings, committee structure, and firm value”, Journal of Corporate Finance, Elsevier, Vol. 16 No. 4, pp. 533–553.
Cao, D., Lorenzoni, G., and Walentin, K. (2019), “Financial frictions, investment, and Tobin’s q”, Journal of Monetary Economics, North-Holland, Vol. 103, pp. 105–122, doi: 10.1016/j.jmoneco.2018.08.002.
Chahine, S. and Tohmé, N. S. (2009), “Is CEO Duality Always Negative? An Exploration of CEO Duality and Ownership Structure in the Arab IPO Context”, Corporate Governance: An International Review, Vol. 17 No. 2, pp. 123–141, doi: 10.1111/j.1467-8683.2008.00724.x.
Chari, A., Chen, W. and Dominguez, K. M. E. (2012), “Foreign Ownership and Firm Performance: Emerging Market Acquisitions in the United States”, IMF Economic Review, Vol. 60 No. 1, pp. 1–42, doi: 10.1057/imfer.2012.1.
Cheema, M. U., Munir, R. and Su, S. (2016), “Political connections and organisational performance: evidence from Pakistan”, International Journal of Accounting & Information Management, Emerald Group Publishing Limited, Vol. 24 No. 4, pp. 321–338.
Chen, P., and Dagestani, A. A. (2023), “Greenwashing behavior and firm value – From the perspective of board characteristics”, Corporate Social Responsibility and Environmental Management, Vol. 30 No. 5, pp. 2330–2343, doi: 10.1002/csr.2488.
Chen, T. (2015), “Institutions, board structure, and corporate performance: Evidence from Chinese firms”, Journal of Corporate Finance.
Chen, Z., and Keefe, M.O. (2020), “Rookie directors and firm performance: Evidence from China1”, Journal of Corporate Finance, Vol. 60, p. 101511, doi: 10.1016/j.jcorpfin.2019.101511.
Christensen, J., Kent, P., and Stewart, J. (2010), “Corporate Governance and Company Performance in Australia: Corporate Governance and Company Performance in Australia”, Australian Accounting Review, Vol. 20 No. 4, pp. 372–386, doi: 10.1111/j.1835-2561.2010.00108.x.
Chulkov, D. V., and Barron, J. M. (2023), “Incentive pay sensitivity to firm performance prior to anticipated CEO turnover”, Heliyon, Vol. 9 No. 11, p. e22163, doi: 10.1016/j.heliyon.2023.e22163.
Claassen, B., Dam, L. and Heijnen, P. (2023), “Corporate financing policies, financial leverage, and stock returns”, The North American Journal of Economics and Finance, Vol. 68, p. 101992, doi: 10.1016/j.najef.2023.101992.
Coles, J. L., Daniel, N. D., and Naveen, L. (2008), “Boards: Does one size fit all?”, Journal of Financial Economics, Vol. 87 No. 2, pp. 329–356, doi: 10.1016/j.jfineco.2006.08.008.
Ehikioya, B. I. (2009), “Corporate governance structure and firm performance in developing economies: evidence from Nigeria”, Corporate Governance: The International Journal of Business in Society, Emerald Group Publishing Limited, Vol. 9 No. 3, pp. 231–243.
Eissa, A. M., and Eliwa, Y. (2021), “The effect of political connections on firm performance: evidence from Egypt”, Asian Review of Accounting, Emerald Publishing Limited, Vol. 29 No. 3, pp. 362–382.
El Mir, A., and Seboui, S. (2008), “Corporate governance and the relationship between EVA and created shareholder value”, Corporate Governance: The International Journal of Business in Society, Vol. 8 No. 1, pp. 46–58, doi: 10.1108/14720700810853392.
Elsayed, K. (2007), “Does CEO Duality Really Affect Corporate Performance?: DOES CEO DUALITY REALLY AFFECT CORPORATE PERFORMANCE?”, Corporate Governance: An International Review, Vol. 15 No. 6, pp. 1203–1214, doi: 10.1111/j.1467-8683.2007.00641.x.
Erdogan, M. and Yamaltdinova, A. (2019), “A Panel Study of the Impact of R&D on Financial Performance: Evidence from an Emerging Market”, Procedia Computer Science, Vol. 158, pp. 541–545, doi: 10.1016/j.procs.2019.09.087.
Frijns, B., Dodd, O. and Cimerova, H. (2016), “The impact of cultural diversity in corporate boards on firm performance”, Journal of Corporate Finance, Vol. 41, pp. 521–541, doi: 10.1016/j.jcorpfin.2016.07.014.
García-Ramos, R. and Díaz, B. D. (2021), “Board of directors structure and firm financial performance: A qualitative comparative analysis”, Long Range Planning, Vol. 54 No. 6, p. 102017, doi: 10.1016/j.lrp.2020.102017.
Gaur, S. S., Bathula, H. and Singh, D. (2015), “Ownership concentration, board characteristics and firm performance: A contingency framework”, Management Decision, Vol. 53 No. 5, pp. 911–931, doi: 10.1108/MD-08-2014-0519.
Guest, P. M. (2009), “The impact of board size on firm performance: evidence from the UK”, The European Journal of Finance, Vol. 15 No. 4, pp. 385–404, doi: 10.1080/13518470802466121.
Hair, J. F., Hult, G. T .M., Ringle, C. M., and Sarstedt, M. (2017a), A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM), 2nd Edtion., Sage Publications, Inc.
He, X. and Chen, A. (2021), “Impact of Chinese firms’ political connections on EVA performance: the moderating roles of connection heterogeneity and product diversification”, Chinese Management Studies, Emerald Publishing Limited, Vol. 16 No. 1, pp. 211–230, doi: 10.1108/CMS-09-2020-0377.
Horváth, R. and Spirollari, P. (2012), “Do the Board of Directors’ Characteristics Influence Firm’s Performance? The U.S. Evidence”, Prague Economic Papers, Vol. 21 No. 4, pp. 470–486, doi: 10.18267/j.pep.435.
Idris, F., Buchdadi, A., Muttaqien, M. and Hariguna, T. (2020), “The role of the board of director with political connection for increasing the firm value”, Accounting, Vol. 6 No. 7, pp. 1285–1290.
Jensen, M. C. (1993), “The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems”, The Journal of Finance, Vol. 48 No. 3, pp. 831–880, doi: 10.1111/j.1540-6261.1993.tb04022.x.
Jermias, J. and Gani, L. (2014), “The impact of board capital and board characteristics on firm performance”, The British Accounting Review, Vol. 46 No. 2, pp. 135–153, doi: 10.1016/j.bar.2013.12.001.
Jin, R., Jiang, X., and Hu, H. W. (2023), “Internal and external CSR in China: How do women independent directors matter?”, Asia Pacific Journal of Management, Vol. 40 No. 1, pp. 169–204, doi: 10.1007/s10490-021-09783-9.
Judge, W. Q., and Zeithaml, C. P. (1992), “INSTITUTIONAL AND STRATEGIC CHOICE PERSPECTIVES ON BOARD INVOLVEMENT IN THE STRATEGIC DECISION PROCESS.”, Academy of Management Journal, Vol. 35 No. 4, pp. 766–794, doi: 10.2307/256315.
Kiel, G. C., and Nicholson, G. J. (2003), “Board Composition and Corporate Performance: how the Australian experience informs contrasting theories of corporate governance”, Corporate Governance, Vol. 11 No. 3, pp. 189–205, doi: 10.1111/1467-8683.00318.
Kijewska, A. (2016), “Causal analysis of determinants influencing the Economic Value Added (EVA) – a case of Polish entity”, Journal of Economics and Management, Vol. 26, pp. 52–70, doi: 10.22367/jem.2016.26.03.
Kyere, M., and Ausloos, M. (2021), “Corporate governance and firms financial performance in the United Kingdom”, International Journal of Finance & Economics, Vol. 26 No. 2, pp. 1871–1885, doi: 10.1002/ijfe.1883.
Lee, C.-Y., Wen, C.-R., and Thi-Thanh-Nguyen, B. (2024), “Board Expertise Background and Firm Performance”, International Journal of Financial Studies, Multidisciplinary Digital Publishing Institute, Vol. 12 No. 1, p. 17, doi: 10.3390/ijfs12010017.
Lew, Y. K., Yu, J., and Park, J.-Y. (2018), “The impacts of independent director and CEO duality on performance in the Chinese post-institutional-transition era”, Canadian Journal of Administrative Sciences / Revue Canadienne Des Sciences de l’Administration, Vol. 35 No. 4, pp. 620–634, doi: 10.1002/cjas.1468.
Li, H., Meng, L., Wang, Q., and Zhou, L.-A. (2008), “Political connections, financing and firm performance: Evidence from Chinese private firms”, Journal of Development Economics, Elsevier, Vol. 87 No. 2, pp. 283–299.
Lin, C., Lin, P., and Song, F. (2010), “Property rights protection and corporate R&D: Evidence from China”, Journal of Development Economics, Elsevier, Vol. 93 No. 1, pp. 49–62.
Lin, C., Ma, Y., Malatesta, P. and Xuan, Y. (2011), “Ownership structure and the cost of corporate borrowing”, Journal of Financial Economics, Elsevier, Vol. 100 No. 1, pp. 1–23.
Lin, W.-L., Cheah, J.-H., Azali, M., Ho, J. A., and Yip, N. (2019), “Does firm size matter? Evidence on the impact of the green innovation strategy on corporate financial performance in the automotive sector”, Journal of Cleaner Production, Vol. 229, pp. 974–988, doi: 10.1016/j.jclepro.2019.04.214.
Lipton, M., and Lorsch, J. W. (1992), “A modest proposal for improved corporate governance”, The Business Lawyer, JSTOR, pp. 59–77.
Liu, X., Zhao, R., and Guo, M. (2023), “CEO turnover, political connections, and firm performance: Evidence from China”, Emerging Markets Review, Vol. 55, p. 100965, doi: 10.1016/j.ememar.2022.100965.
Liu, Y., Saleem, S., Shabbir, R., Shabbir, M. S., Irshad, A., and Khan, S. (2021), “The relationship between corporate social responsibility and financial performance: a moderate role of fintech technology”, Environmental Science and Pollution Research, Vol. 28 No. 16, pp. 20174–20187, doi: 10.1007/s11356-020-11822-9.
Lorsch, J. W., and Maciver, E. (1989), “Pawns or Potentates: The Reality of America’s Corporate Boards (Harvard Business School Press, Cambridge, MA)”.
Lu, Y., and Cao, Y. (2018), “The individual characteristics of board members and internal control weakness: Evidence from China”, Pacific-Basin Finance Journal, Vol. 51, pp. 75–94, doi: 10.1016/j.pacfin.2018.05.013.
Luo, Y. (2023), “Management compensation and corporate governance reform in China”, Journal of Chinese Governance, Vol. 8 No. 1, pp. 1–33, doi: 10.1080/23812346.2021.2008184.
Makpotche, M., Bouslah, K., and M’Zali, B. (2024), “Corporate governance and green innovation: international evidence”, Review of Accounting and Finance, Emerald Publishing Limited, Vol. 23 No. 2, pp. 280–309, doi: 10.1108/RAF-04-2023-0137.
McIntyre, M. L., Murphy, S. A., and Mitchell, P. (2007), “The top team: examining board composition and firm performance”, Corporate Governance: The International Journal of Business in Society, Vol. 7 No. 5, pp. 547–561, doi: 10.1108/14720700710827149.
Millet-Reyes, B., and Zhao, R. (2010), “A Comparison Between One-Tier and Two-Tier Board Structures in France: Comparison Between One-Tier and Two-Tier Board Structures”, Journal of International Financial Management & Accounting, Vol. 21 No. 3, pp. 279–310, doi: 10.1111/j.1467-646X.2010.01042.x.
Mishra, R. K., and Kapil, S. (2018), “Board characteristics and firm value for Indian companies”, Journal of Indian Business Research, Vol. 10 No. 1, pp. 2–32, doi: 10.1108/JIBR-07-2016-0074.
Niessen, A., and Ruenzi, S. (2010), “Political Connectedness and Firm Performance: Evidence from Germany”, German Economic Review, Vol. 11 No. 4, pp. 441–464, doi: 10.1111/j.1468-0475.2009.00482.x.
O’Connell, V., and Cramer, N. (2010), “The relationship between firm performance and board characteristics in Ireland”, European Management Journal, Vol. 28 No. 5, pp. 387–399, doi: 10.1016/j.emj.2009.11.002.
Peni, E. (2014), “CEO and Chairperson characteristics and firm performance”, Journal of Management & Governance, Vol. 18 No. 1, pp. 185–205, doi: 10.1007/s10997-012-9224-7.
Pereira, V. M. M., and Filipe, J.A.C.B. (2022), “Board Members’ Educational Background and Financial Performance: Evidence from Eurozone Banks”, Journal of Central Banking Theory and Practice, Vol. 11 No. 3, pp. 203–227, doi: 10.2478/jcbtp-2022-0030.
Pucheta-Martínez, M. C., and Gallego-Álvarez, I. (2020), “Do board characteristics drive firm performance? An international perspective”, Review of Managerial Science, Vol. 14 No. 6, pp. 1251–1297, doi: 10.1007/s11846-019-00330-x.
Rafiq, S., Salim, R., and Smyth, R. (2016), “The moderating role of firm age in the relationship between R&D expenditure and financial performance: Evidence from Chinese and US mining firms”, Economic Modelling, Vol. 56, pp. 122–132, doi: 10.1016/j.econmod.2016.04.003.
Reguera-Alvarado, N., and Bravo, F. (2017), “The effect of independent directors’ characteristics on firm performance: Tenure and multiple directorships”, Research in International Business and Finance, Vol. 41, pp. 590–599, doi: 10.1016/j.ribaf.2017.04.045.
Ren, X., Zeng, G., and Zhao, Y. (2023), “Digital finance and corporate ESG performance: Empirical evidence from listed companies in China”, Pacific-Basin Finance Journal, Elsevier, Vol. 79, p. 102019.
Sakawa, H., Watanabel, N., Yamauchi, S., and Liu, R. (2023), “The effect of Tobin’s q on investment in a bank-based financial system: Evidence from Japan”, Pacific-Basin Finance Journal, North-Holland, Vol. 77, p. 101880, doi: 10.1016/j.pacfin.2022.101880.
Salvi, A., Tron, A., and Colantoni, F. (2024), “The impact of CEO turnover on firm performance and insolvency risk - A global analysis”, Finance Research Letters, Vol. 62, p. 105093, doi: 10.1016/j.frl.2024.105093.
Sharma, A. K., and Kumar, S. (2010), “Economic Value Added (EVA) - Literature Review and Relevant Issues”, International Journal of Economics and Finance, Vol. 2 No. 2, p. p200, doi: 10.5539/ijef.v2n2p200.
Shleifer, A., and Vishny, R. W. (1997), “A Survey of Corporate Governance”, The Journal of Finance, Vol. 52 No. 2, pp. 737–783, doi: 10.1111/j.1540-6261.1997.tb04820.x.
Singh, R. K., Kumar, N. and Kumar, A. (2023), “Impact of Corporate Governance Practices on Economic and Market Value Addition of Indian Public and Private sector Companies”, Vol. 10 No. 4.
Sobel, R., and Graefe-Anderson, R. (2018), “The Relationship between Political Connections and the Financial Performance of Industries & Firms”, SSRN Electronic Journal, doi: 10.2139/ssrn.3211630.
Stewart, G. B. (1991), The Quest for Value., HarperCollins Publishers, New York.
Stulz, R. M., and Lang, L. H. P. (1994), “Tobin’s q, Corporate Diversification, and Firm Performance”, Journal of Political Economy, Vol. 102 No. 6, pp. 1248–1280, doi: 10.1086/261970.
Teirlinck, P. (2017), “Configurations of strategic R&D decisions and financial performance in small-sized and medium-sized firms”, Journal of Business Research, Vol. 74, pp. 55–65, doi: 10.1016/j.jbusres.2017.01.008.
Vafeas, N. (1999), “Board meeting frequency and firm performance”, Journal of Financial Economics, Elsevier, Vol. 53 No. 1, pp. 113–142.
Vithessonthi, C., and Tongurai, J. (2015), “The effect of firm size on the leverage–performance relationship during the financial crisis of 2007–2009”, Journal of Multinational Financial Management, Vol. 29, pp. 1–29, doi: 10.1016/j.mulfin.2014.11.001.
Wang, J., Chen, M.-H., Fang, C.-Y., and Tian, L. (2018), “Does Board Size Matter for Taiwanese Hotel Performance? Agency Theory or Resource Dependence Theory”, Cornell Hospitality Quarterly, Vol. 59 No. 4, pp. 317–324, doi: 10.1177/1938965517735906.
Wang, Y., Yao, C.,and Kang, D. (2019), “Political connections and firm performance: Evidence from government officials’ site visits”, Pacific-Basin Finance Journal, Vol. 57, p. 101021, doi: 10.1016/j.pacfin.2018.05.003.
Wattanatorn, W., and Padungsaksawasdi, C. (2021), “The board effectiveness index and stock price crash risk”, Managerial Finance, Emerald Publishing Limited, Vol. 48 No. 1, pp. 126–135, doi: 10.1108/MF-04-2021-0150.
Wu, X., Dluhošová, D., and Zmeškal, Z. (2023), “The moderating role of a corporate life cycle with the impact of economic value-added on corporate social responsibility: Evidence from China’s listed companies”, Emerging Markets Review, Vol. 55, p. 101021, doi: 10.1016/j.ememar.2023.101021.
Xu, Q., Fernando, G. D., and Schneible, R. A. (2022), “Age diversity, firm performance and managerial ability”, Review of Accounting and Finance, Emerald Publishing Limited, Vol. 21 No. 4, pp. 276–298, doi: 10.1108/RAF-09-2021-0232.
Yasser, Q. R., Mamun, A. A., and Rodrigs, M. (2017), “Impact of board structure on firm performance: evidence from an emerging economy”, Journal of Asia Business Studies, Emerald Publishing Limited, Vol. 11 No. 2, pp. 210–228.
Yermack, D. (1996), “Higher market valuation of companies with a small board of directors”, Journal of Financial Economics, Vol. 40 No. 2, pp. 185–211, doi: 10.1016/0304-405X(95)00844-5.
Zahra, S. A., and Pearce, J. A. (1989), “Boards of Directors and Corporate Financial Performance: A Review and Integrative Model”, Journal of Management, Vol. 15 No. 2, pp. 291–334, doi: 10.1177/014920638901500208.
Zhang, D., Zhang, Z., Ji, Q., Lucey, B., and Liu, J. (2021), “Board characteristics, external governance and the use of renewable energy: International evidence”, Journal of International Financial Markets, Institutions and Money, Vol. 72, p. 101317, doi: 10.1016/j.intfin.2021.101317.
Zhang, J., and Aboud, A. (2019), “Determinants of economic value added (EVA) in Chinese listed banks”, Asian Review of Accounting, Vol. 27 No. 4, pp. 595–613, doi: 10.1108/ARA-11-2018-0216.
Zhou, M., Li, K., and Chen, Z. (2021), “Corporate governance quality and financial leverage: Evidence from China”, International Review of Financial Analysis, Vol. 73, p. 101652, doi: 10.1016/j.irfa.2020.101652.
Zhu, J., Ye, K., Tucker, J. W., and Chan, K. (Johnny) C. (2016), “Board hierarchy, independent directors, and firm value: Evidence from China”, Journal of Corporate Finance, Vol. 41, pp. 262–279, doi: 10.1016/j.jcorpfin.2016.09.009.

Wu, S., Saidin, S. F., Osman, M. N. H., & Teruki, N. (2024). A Dynamic Estimation of Board Efficiency Index and Financial Performance: Evidence from China. International Journal of Academic Research in Accounting, Finance and Management Sciences, 14(3), 319–338.

Copyright: © 2024 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode