Do Independent Director Characteristics Affect Firm Performance Under the COVID-19 Epidemic? Empirical Evidence from China

  • ZHAO, Xiaoqing (Graduate School of Management, Management and Science University) ;
  • MU, Qingbang (School of Management, Henan University of Technology) ;
  • TEO, Brian Sheng-Xian (International Academic Affairs Department, Management and Science University)
  • Received : 2022.10.10
  • Accepted : 2023.01.15
  • Published : 2023.01.30


This paper investigates the effect of independent directorship on the firm performance of Chinese listed companies under the impact of the global COVID-19 epidemic. The study starts by assessing the relationship between independent director-related characteristics and firm performance, then mines independent director characteristics variables, collects variable data, proposes reasonable hypotheses, and constructs a data model. 1597 companies listed on Shanghai and Shenzhen stock index, China, from 2020 to 2021 has been selected as the research sample. An empirical study on the relationship between independent directors' characteristics and firm performance was conducted using SPSS25. The results show that under the impact of the global COVID-19 epidemic, the proportion of independent directors on the board of directors, the age of independent directors, the remuneration of independent directors, and the overseas background of independent directors in Chinese listed companies have a negative relationship with the current firm performance, while the proportion of female independent directors and the part-time rate of independent directors do not have a positive effect on firm performance. The findings of this study strongly imply that independent directors' characteristics play a significant role in corporate governance and firm performance in Chinese listed companies and that the external environment has an impact on how well independent directors can carry out their duties.



  1. Baysinger, B. D., & Butler, H. N. (1985). Corporate governance and the board of directors: Performance effects of changes in board composition. Journal of Law, Economics & Organization, 1(1), 101-124.
  2. Bilimoria, D., & Piderit, S. K. (1994). Board committee membership: Effects of sex-based bias. Academy of Management Journal, 37(6), 1453-1477.
  3. Esa, E., Mohamad, N. R., Zakaria, W. Z. W., & Ilias, N. (2022). Do corporate governance and reputation two sides of the same coin? Empirical evidence from Malaysia. Journal of Asian Finance, Economics, and Business, 9(1), 0219-0228.
  4. Fama, E. F., & Jensen, M. C. (2017). Separation of ownership and control. Journal of Law and Economics, 26(2), 301-325.
  5. Fich, E. M., & Shivadasani, A. (2006). Are busy boards effective monitors? Journal of Financial Markets Research, 7, 33-47.
  6. Gao, L., Luo, Y., & Zhang, J. (2007). Characteristics of independent directorship and firm performance: An empirical study of Chinese listed companies. Economics and Management Research, 3, 60-66.
  7. Giannetti, M., Liao, G. M., & Yu, X. Y. (2015). The brain gain of corporate boards: Evidence from China. Journal of Finance, 70(4), 1629-1682.
  8. Hao, Y. H., Gan, T., & Lin, X. Y. (2014). The effect of independent director's status on corporate performance. Journal of Management, 11(04), 520-524.
  9. Khan, I., & Wang. M. (2021). Evaluating Corporate Performance and Bank Productivity in China: The Moderating Role of Independent Directors. Sustainability, (13), 3193. su13063193
  10. Li, J., & Ang, J. S. (2000). Quantity versus quality of directors time: The effectiveness of directors and number of outside directorships. Managerial Finance, 26(10), 1-21.
  11. Li, L., & Zhou, F. L. (2019). A study on the impact of independent directors' identity characteristics on firm performance. Economic Issues, 06, 97-103.
  12. Li, Z. (2016). Can independent directorship improve corporate performance: An empirical study of Chinese listed companies. Marketing Modernization Magazine, 2, 74-76.
  13. Osman, M. A. M., & Samontaray, D. P. (2022). Corporate governance and performance of insurance companies in the Saudi market. Journal of Asian Finance, Economics, and Business, 9(4), 0213-0228.
  14. Rosenstein, S., & Wyatt, J. G. (1990). Outside directors, board independence, and shareholder wealth. Journal of Financial Economics, 26(2), 175-191.
  15. Shivdasani, A., & Yermack, D. (1999). CEO involvement in the selection of new board members: An empirical analysis. Journal of Finance, 54(5), 1829-1853.
  16. Steven, T., & Petra, M. (2005). Do outside independent directors strengthen corporate boards? Corporate Governance, 5(1), 55-64.
  17. Sun, W., Zhang, W. Y., & Xu, Z. X. (2021). The impact of quality management practices on firms' innovation performance: A new interpretation of the resource-based theory. Technology Economics, 9, 65-77.
  18. Thakolwiroj, C., & Sithipolvanichgul, J. (2021). Board characteristics and capital structure: Evidence from Thai listed companies. Journal of Asian Finance, Economics, and Business, 8(2), 0861-0872.
  19. Wang, C., Deng, X., Alvarez-Otero, S., Sial, M. S., Comite, U., Cherian, J., & Olah, J. (2021). Impact of Women and Independent Directors on Corporate Social Responsibility and Financial Performance: Empirical Evidence from an Emerging Economy. Sustainability, (13), 6053.
  20. Wang, W. (2014). Independent directors and corporate performance in China: A meta-empirical study. Available at SSRN 2417078.
  21. Zeng, C. Y. (2018) Independent Directors, Female Directors and Performance of Financial Listed Companies in China. Modern Economy, 9, 652-663.
  22. Zhang, X. Y., & Zhou, F. (2010). How do companies adjust their independent directors after a mishap-evidence from independent directors' backgrounds? Journal of Service Science and Management, 03(3), 336-344.
  23. Zhou, Z. J., & Xiu, Z. F. (2014). An empirical study on the impact of female directors on corporate business performance: Based on the results of a 2000~2009 sample of A-share listed companies in the Chinese securities market. Finance and Accounting, 9, 28-37.