Does one size fit all? A study of the simultaneous relations among ownership, corporate governance mechanisms, and the financial performance of firms in China

We draw on the many aspects of corporate governance examined in the developed economies and extend them to the Chinese environment. We find evidence of strong linkage and interdependence in the use of different control mechanisms. While there are significant relations between the governance control mechanisms and firm performance, these disappear when using simultaneous equation estimation. Our findings support the argument that governance control mechanisms are substitutes for one another and there is no one set of mechanisms that are optimal in maximizing firms' performances.