Corporate governance and innovation in the Chinese banking sector
Duo Wang
Manchester School of Management, UMIST, Manchester, United Kingdom
Marcela Miozzo
Manchester School of Management, UMIST, Manchester, United Kingdom
PP: 25
Abstract
The paper examines the relationship between corporate governance and innovation in the Chinese banking sector. Drawing on interviews with senior managers and employees in state-owned, joint-holding and foreign banks, we examine the nature of the challenges faced by different types of firms in the context of reform and globalisation.
Firms with different ownership structures respond to the challenges in ways that reflect different resource allocation and commitment mechanisms. State-owned and joint-holding firms have access to large-scale resources for innovation but face restrictions to commit these resources to innovation.
Ambiguity of responsibility forces managers of state-owned firms to pursue short-term strategies. Also, managers of state-owned firms must bear the responsibility for social security and employment. Foreign firms have access to large-scale resources through their global networks and good reputation, but their strategies are set at the (regional) headquarter's level. They have superior management and technology systems but lack close relations with government and regulatory bodies.
Keywords
corporate governance, china, services, innovation, banking, reform
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