1500 words research proposal
master level
corporate governance is the independent variables
financial performance is the dependent variables, indicators as dependent variables for the research such as ROE and ROA
The Impacts of corporate governance on the commercial Bank of JiangSu Provence in China-An Analysis Based on Performance of Bank
1. Introduction
1.1. Background of the study
In China’s economic development, business operation efficiency plays an important role. It not only affects the development of commercial banks, but also affects the competitiveness of rivals in the same industry. At the same time, it also affects the distribution of resources and the potential for future development. Among these factors, corporate governance has become one of the important factors. In fact, with the development of the economy, China’s financial reform system has gradually changed. After China joined the WTO, the competition between Chinese and foreign banks has become increasingly fierce. This article analyzes the status of commercial banks in Jiangsu Province, China. Its analysis contributes some useful information in corporate governance.
1.2. Research purposes
The main purpose of this paper is to further analysis the impact of performance of corporate governance by determine the commercial bank in JiangSu.
1.3. The limitation
This article only studies the status of commercial banks in one region of China. Although it can provide some key information, it does not represent all national commercial banks.
2. Literature review
2.1. Corporate governance
According to Xu et al. (1999), the corporate governance structure means that the company needs to achieve a mutually restrictive state of management rights and ownership to maximize the profit of the company and improve the company’s operational performance. It is not a particularly fixed system. Instead, the company should adjust its corporate governance structure according to its own development. It needs to align the goals of management and all stakeholders as much as possible. Hardy (2006) claimed that an effective corporate governance structure can help companies achieve their business goals and maximize the benefits to the business. A good corporate governance system can help companies improve operational performance (Kaplan and Norton, 2001).
2.2 The importance corporate governance
According to Allen and Zhao (2007), corporate governance can be seen as a system for companies to manage and control the interests of stakeholders and shareholders. At present, research scholars have found that corporate governance has an important impact on business performance. In the process of analysis, they also face certain challenges. The structure of the board of directors may be an ideal standard to measure corporate governance. A reasonable board structure of the company can improve bank performance and influence the bank’s reputation (Pathan and Faff, 2013). However, Randøy and Nielsen (2002) claimed that corporate governance should consider variables that directly affect company performance.
2.3 Agency theory
Jensen and Smith (2000) agreed that agency theory is the relationship between shareholders and managers by separating their ownership and management rights. It believes that if these two rights of the company are concentrated in the hands of managers, they will ignore the interests of the company in pursuit of their own interests. The interests of shareholders may be affected. This creates potential ethical issues. Bergen et al.(1992) described that the principal should take appropriate measures for the agent to help the company maximize profits. The principal should take appropriate measures against the agent to help the company maximize profits.
In agency theory, the assessment of firm performance relates to whether the agent’s ability can maximize the client’s interests. The performance evaluation is closely related to the company’s incentive mechanism (Weir et al., 2002). Effective management mechanisms allow agents to leverage their talents. In terms of the agent’s reward and punishment system, it is based on a scientific and reasonable evaluation of the company’s performance. Conversely, it can make it difficult for companies to achieve the desired goals.
2.4 Stakeholder theory
According to Donaldson and Preston (1995), stakeholder theory includes all groups that are of interest to the company. It is very important for the support and maintenance of stakeholders. It can help companies create a good development environment and enable them to achieve their long-term goals. Businesses need to reasonably determine the relationship between them. It includes not only the company’s shareholders, suppliers, but also employees and customers. The continued development of any business has a close relationship with stakeholders (Hillman and Keim, 2001). For example, shareholders, management, employees, consumers and so on. The theory illustrates the close relationship between them and the realization of stakeholder profits and expected goals. At the same time, stakeholders should be part of corporate social responsibility. Corporate social responsibility issues need to be addressed by stakeholders. This will enable the sustainable development of the company.
2.4 The relationships between corporate governance and performance on commercial banks
Researchers have studied the link between corporate governance and corporate performance. Brown and Caylor (2009) agreed that the performance of independent directors and companies is not necessarily related. However, Weir and Laing (2000) found that the appointment of outside directors would affect the company’s performance. If the share of shareholders’ shares is small, there is no relationship between performance and corporate governance. If the company has fewer shares, it will generate agency costs at the management level. When managers own shares, they will maximize the benefits of shareholders. Therefore, most studies show that corporate governance and performance are a positive correlation. Corporate governance affects the performance of a company in a variety of ways (Kiel and Nicholson, 2003).
Corporate governance structures play an important role in commercial banks. Its quality affects the performance of the company. A good corporate management system can help commercial banks establish a good foundation for development. It can help companies strengthen internal controls and reduce operating costs. In addition, it can help commercial banks establish a virtuous circle to achieve long-term development.
3. Research methodology and design
3.1 Population and sample of the study
The studuy made use of four banks out of eight banks in JangSu provience in China. They are: Bank of Nanjing, Jiangsu Bank, Jiangsu Yangtze River Commercial Bank, Suzhou Bank. The data used for this study is collected from financial statement ten period in recent years.
3.2 Method of analysis In this process, mutiple linear regression is used to explain. It is a quantitative design. The quantitative design use data for analysis. The accuracy and logical inference are higher. Independent Variables Board size Internal audit committee Board composition
Loan deposit ratio
Capital adequacy ratio
Dependent variables Return on assets Earnings per share
3.3 Analysis of data
Analyze the data of these commercial Bank and analyze the impact of corporate governance structure on company performance through data that would be found.
4. Expected results
Form the correlation coefficients, analyzing the significant and insignificant.
5. Conclusion
A good corporate governance system is the basis for the stable development of enterprises. In recent years, Chinese commercial banks have also implemented a series of reform measures. The company’s performance has also improved. However, in many state-owned commercial banks, there are still many drawbacks. Insider control and administrative intervention are two common reasons. This has led to an inadequate governance structure. If the corporate governance structure does not meet the company’s development status, this will hinder the long-term stable development of the company. A suitable corporate governance system can help commercial banks continue to grow, and at the same time, it will help them to be competitive under the conditions of economic globalization. Enterprises should constantly adjust their own governance structure and choose the appropriate governance method according to the development. In the context of globalization, China’s commercial banks must constantly innovate and reform their corporate governance structure. This will turn the crisis encountered into an opportunity. In addition, a suitable corporate management system can resolve conflicts of interest between stakeholders and achieve corporate goals. At the same time, it can help companies have a positive cycle of operations. It can help companies improve efficiency and achieve business goals. It is of great significance to the sustainable development of Chinese commercial banks.
Reference
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