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The influence of western banks on corporate governance in China

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  • Jane Nolan

Abstract

This study draws on in-depth qualitative interviews to investigate the variety of institutional forces which influence the adoption of western corporate governance mechanisms in Chinese banks. Following path dependency models of institutional change it was shown that cognitive and normative institutions, including a ‘who you know’ or guanxi credit culture, mean that the practical influence of western banks on corporate governance reforms was perceived to be ineffectual in most cases. Given the failure of western credit-rating systems in the sub-prime crisis, it is likely that this perception will increase in the future. The majority of western actors believed that the main reason Chinese banks seek to co-operate with western institutions was to enhance the legitimacy of the Chinese bank in the global financial environment, rather than to actively change existing governance mechanisms.

Suggested Citation

  • Jane Nolan, 2010. "The influence of western banks on corporate governance in China," Asia Pacific Business Review, Taylor & Francis Journals, vol. 16(3), pages 417-436, July.
    • Handle: RePEc:taf:apbizr:v:16:y:2010:i:3:p:417-436
    DOI: 10.1080/13602380903315092
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    References listed on IDEAS

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    1. Bai, Chong-En & Liu, Qiao & Lu, Joe & Song, Frank M. & Zhang, Junxi, 2004. "Corporate governance and market valuation in China," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 599-616, December.
    2. Denis, Diane K. & McConnell, John J., 2003. "International Corporate Governance," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(1), pages 1-36, March.
    3. Qiao Liu, 2006. "Corporate Governance in China: Current Practices, Economic Effects and Institutional Determinants," CESifo Economic Studies, CESifo Group, vol. 52(2), pages 415-453, June.
    4. Violaine Cousin, 2007. "Banking in China," Palgrave Macmillan Studies in Banking and Financial Institutions, Palgrave Macmillan, number 978-0-230-59584-2, February.
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    Cited by:

    1. Lee, Liane W.Y. & Tang, Yiming & Yip, Leslie S.C. & Sharma, Piyush, 2018. "Managing customer relationships in the emerging markets – guanxi as a driver of Chinese customer loyalty," Journal of Business Research, Elsevier, vol. 86(C), pages 356-365.
    2. Choon-Yin Sam, 2013. "Partial privatisation and the role of state owned holding companies in China," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(3), pages 767-789, August.
    3. Taeyoung Yoo, 2017. "The performance dimension in symbolic management revisited: the functional role of traditional mechanisms in large Korean firms," Asia Pacific Business Review, Taylor & Francis Journals, vol. 23(1), pages 116-134, January.
    4. Elisabeth Paulet & Francesc Relano, 2018. "Chinese banking reforms in perspective: towards global alignment or national specificity?," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(3), pages 294-311, May.

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