Concentrated corporate ownership prevails in most countries, so the relationship between controlling shareholders and minority shareholders is an important principle-agent problem. Tunnelling, the transfer of assets and profit for the benefit of controlling owners, is the most important way of expropriating small shareholders. While tunnelling is rampant in emerging economies and even some developed countries, related research lacks convincing evidence. On the other hand, large shareholders sometimes use private funds to prop up firms in financial distress. Although there is plenty of anecdotal and indirect evidence on propping, it lacks direct large-sample examination. This study presents a pooled cross-sectional analysis of 4373 publicly listed companies in China between 2001 and 2004. The analysis not only examines the effects of various variables on the exploitation of related party transactions by controlling owners for tunnelling and propping, and also investigates the effects of tunnelling and propping on firm performance and valuation. The study reveals that the presence of controlling shareholders and higher control rights lead to higher levels of tunnelling. Conversely the existence of other large shareholders reduces the magnitude of tunnelling. In addition, the study shows that pyramidal-controlled firms and firms owned by the State display more incidences of tunnelling. When firms have better investment opportunity, however, their controlling shareholders tend to divert fewer funds for their private gains. It is also found that controlling shareholders offer funds to financially stricken firms under their control. This is the first study that finds direct evidence on the occurrence of propping although not all badly-performing firms are propped up. / While tunnelling negatively affects operating performance and firm valuation, propping has a positive effect on firm valuation. The occurrence and magnitude of tunnelling is greater than that of propping. Propping only occurs to partial firms in financial distress, yet there is no improvement in those firms’ performance. As propping from new controlling owners is more a way of back-door listing, they tend to engage in tunnelling when their control is secure. In short, when legal protection of minority shareholders is weak, controlling owners tend to tunnel for private benefit. Hence policymakers and regulators must recognise that to eliminate widespread expropriation, the establishment of strong corporate governance in well-functioning institutions and strong legal enforcement is important. Lower levels of tunnelling in years 2003 and 2004 justify the positive effect of stringent regulation. Yet, more needs to be undertaken beyond the legal and regulatory level such as an allowance for diversified corporate ownership and the transformation of non-floatable shares to be floated on the exchange to align interests of large and minority shareholders.

Corporate governance can play a significant role in financial market stability and economic development. Corporate governance scholars have provided controversial results with respect to the relationships between corporate governance and both corporate financial performance and market value. Based on agency theory and institutional theory, the purpose of this correlational study was to investigate the relationship between corporate governance mechanisms, financial performance, and market value in Kingdom of Saudi Arabia's 116 firms from 2010 to 2014. Financial performance was measured by return on assets and return on equity, while market value was measured by Tobin's q. Corporate governance mechanisms involved in this study were board size, board independence, board committees, ownership structure, and executive compensation. The financial statements and corporate governance mechanisms collected from the websites of sampled firms and the Saudi stock market (Tadawul). The findings of multiple regression tests revealed a statistically significant relationship between corporate governance mechanisms and both corporate financial performance and market value. This study may contribute to social change by building confidence in the Saudi capital market and improving the lives of stakeholders and community in general. The results may help business leaders understand the influence of corporate governance on their firms' success and the country's growth. Academic researchers, investors, regulatory bodies, practitioners, and experts in the area of corporate governance may benefit as well.

No / This paper seeks to contribute to the existing business strategy and the environment literature by examining the effect of governance structures on environmental performance within a unique context of improving environmental governance, policies, regulations and management. Specifically, we investigate the extent to which corporate board gender diversity, including the proportion, age and level of education of female directors, affect environmental performance of Chinese publicly listed corporations. Using one of the largest Chinese datasets to-date, consisting of a sample of 383 listed A-shares from 2011 to 2015 (i.e., observations of 1,674), our findings are three-fold. First, we find that the proportion and age of female directors have a positive effect on the overall corporate environmental performance. Second, our findings indicate that the proportion and age of female directors also have a positive effect on the three individual environmental performance components, namely environmental (i) strategy, (ii) implementation and (iii) disclosure, respectively. Finally, and by contrast, we do not find any evidence that suggests that the level of education of female directors has any impact on environmental performance, neither the overall environmental performance measure nor its individual components. Our findings have important implication for regulators and policy-makers. Our evidence is robust to controlling for alternative measures, other governance and firm-level control variables, and possible endogeneities. We interpret our findings within a multi-theoretical framework that draws insights from agency, legitimacy, neo-institutional, resource dependence, stakeholder, and tokenism theoretical perspectives.