Financial Data Mining in Chinese Public Companies: Corporate Performance and Corporate Governance in Business Groups

Data mining becomes a vital information technology tool in todaypsilas competitive business world. It helps companies discover previously unknown, valid, and actionable information from various and large databases for crucial business decisions. This paper shows an application of data mining method in corporate governance. With a structural equation model analysis, this paper examines an important issue concerned to the relation between corporate governance and firm performance. Based on a sample of 520 public companies, it is found that ownership structure generally has significant effect on firm performance, with different indicators having different influence on performance, while there is no relationship between structure of board of directors and firm performance. The founding shows big differences between subsidiaries and headquarters in Chinese business groups in the perspective of corporate governance.