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International Listing as a Mechanism of Commitment to More Credible Corporate Governance Practices: the Case of the Bank of China (Hong Kong)

Tobin, Damian and Sun, Laixiang (2005) 'International Listing as a Mechanism of Commitment to More Credible Corporate Governance Practices: the Case of the Bank of China (Hong Kong).' Corporate Governance: An International Review, 13 (1). pp. 81-91.

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Abstract

This paper argues that the deeply rooted cause of poor corporate governance practices in Chinaís state-owned banks is the discretion enjoyed by policy makers to re-optimise their policy choices when they deem necessary and the consequent moral hazard leading to opportunistic behaviours of bank managers. By examining the case of Bank of China Hong Kong (BoCHK), the paper suggests that international listing can provide an effective mechanism to mitigate the consequence of discretionary policies and managerial opportunism at home because the company is now disciplined and regulated by a more developed capital market outside the home jurisdiction. It shows that BoCHKís IPO preparation and first two years of listing on Hong Kong Stock Exchange (HKSE) have induced in-depth corporate restructuring and noticeable improvement in governance practices.

Item Type: Articles
SOAS Departments & Centres: Faculty of Law and Social Sciences > Department of Financial and Management Studies
ISSN: 09648410
DOI (Digital Object Identifier): 10.1111/j.1467-8683.2005.00405.x
Depositing User: Damien Tobin
Date Deposited: 09 Oct 2008 15:26
URI: http://eprints.soas.ac.uk/id/eprint/5575

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