The Governance and Performance of Chinese Companies Listed Abroad: An Analysis of China's Merits Review Approach to Overseas Listings

Abstract

This paper analyzes the goverance and performace of Chinese companies that are listed in the United States. The analysis comes against the backdrop of increasing concern about such companies' governance practices. This concern is curious given the purported ‘merits’ review that Chinese regulators undertake prior to allowing a cross-listing. Thus, this paper compares Chineses companies listed in the US with other US companies and other non-US companies listed in the US. The paper incicates that Chinese companies do not have significantly worse governance or earnings-management practices. They also appear to have stronger operating performance and are less likely to delist.