Principal-principal conflict in the governance of the Chinese public corporation

Yiyi Su, Dean Xu, Phillip H. Phan

Research output: Contribution to journalArticlepeer-review

131 Scopus citations


By examining the level of ownership concentration across firms, we determine how principal-principal conflict, defined as the incongruence of ownership goals among shareholder groups in a corporation, impacts agency costs of Chinese boards of directors. Based on data from Chinese companies listed on the Shanghai and Shenzhen stock exchanges during 1999-2003, we found that ownership concentration had a U-shaped relationship with board compensation, board size and the presence of independent directors. These results provide corroborating evidence that principal-principal conflict can lead to high agency costs.

Original languageEnglish (US)
Pages (from-to)17-38
Number of pages22
JournalManagement and Organization Review
Issue number1
StatePublished - Mar 2008
Externally publishedYes


  • Agency costs
  • Board of directors
  • China
  • Ownership concentration
  • Principal-principal conflict

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management


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