The impact factor of corporate governance on special treatment (ST): a case study of Chinese listed companies

This study investigates the correlation between corporate governance and special treatment (ST) using data from 5,353 listed companies in A-shares across Beijing, Shanghai, and Shenzhen in 2023. Employing logistic regression models, the study examines the influence of four critical factors of corporate governance: the ratio of independent directors, the percentage of shares owned by major shareholders, the gearing ratio, and audit opinion, on a firm's ST status in China. The results indicate that both the ratio of independent directors and financial leverage positively correlate with a firm's ST status, enhancing its special treatment. In contrast, the proportion of ownership by majority shareholders and audit opinions negatively correlate with the level of special treatment, diminishing its special treatment. Notably, firm size appears unrelated to special treatment, suggesting that larger firms receive less special treatment. The correlation between firm age and special treatment remains ambiguous, preventing a conclusive determination. This study utilized a panel model, and data were analyzed using SPSS software to derive the findings. Future research may explore additional governance variables and assess the influence of ESG factors. Overall, the findings provide practical insights for policymakers, investors, and corporate managers, aimed at enhancing the governance of China's capital market.