The study of relationships among office locations, corporate governance and business performance: evidence from China listed companies

Abstract

Purpose - Based on Tobler’s first law of geography, this paper applies the concept on friction of distance, and assumes that business performance and corporate governance are interrelated with the locations where the according businesses site their headquarter offices. Methodology - A Differencing Location Factor survey was designed and used to examine the impacts within. The author first use a multiple regression to analyze Business Performance, then the single-factor and multivariate analysis of variance for Corporate Governance, and the Principal component analysis for comparing the quality of Corporate Governance. Findings- As per empirical results: 1) Corporate business performance significantly correlates with corporate governance and office locations, with a significant difference between various areas; and 2) For enterprises in China , the quality of corporate governance significantly correlates and varies with their office locations. Conclusion- Regarding these results the office location is one of the factors that affect corporate governance and business performance. This also explains the United States, China and Taiwan scholars research that the headquarters office has a tendency to move towards the metropoliscentral in time trajectory.