This study examines the characteristics of board structure that affect
Chinese public firm's financial performance. Using a sample of 871 firms
with 699 observations of previously private firms and 1,914
observations of previously state-owned enterprise (SOE) firms, we
investigate the differences in corporate governance between publicly
listed firms that used to be pure private firms before going public and
listed firms that used to be SOEs before their initial public offerings
(IPOs). Our main finding is that previously private firms outperform
previously SOE firms in China after IPOs. In the wake of becoming listed
firms, previously SOE firms might be faced with difficulties adjusting
to professional business practices to build and extend competitive
advantages. In addition, favorable policies and assistance from the
government to the SOE firms might have triggered complacency, especially
in early years after getting listed. On the other hand, professional
savvy and acumen, combined with efficiency and favorable business
climate created by the government have probably led the previously
private firms to improve their values stronger and faster. [ABSTRACT
FROM AUTHOR]