Board Independence and Performance of Listed SMEsin China: Based on the Perspective of Concentrated Ownership

Abstract

AbstractBased on the sample of listed firms on SMEs board in China during the period 2004-2010, this paper investigates the impact of board independence on firm performance in the presence of significant ownership concentration. This paper does not find the evidence that the board independence of listed SMEs is endogenous. The results show that there is no significant relationship between performance of listed SMEs and board independence, which means more independent director scan not improve the performance of listed SMEs in China. There is significantly positive relationship between ownership concentration and board independence, while there is no significant relationship between ownership concentration and performance of listed SMEs in China.KeywordsBoard independenceOwnership concentrationReturn on assetsSmall and medium-sized enterprisesTobin’s Q