The performance commitment mechanism is widely used in capital operations in China’s A-share market.As of January 2025,88 percent of the companies listed on China’s A-share market have participated in some kind of p...The performance commitment mechanism is widely used in capital operations in China’s A-share market.As of January 2025,88 percent of the companies listed on China’s A-share market have participated in some kind of performance commitment arrangement.1Theperformance commitment mechanism,developed and deeply rooted in Chinese markets and systems,has several distinctive features.It plays a positive role in solving the problem of information asymmetry,strengthening the market credit mechanism,and avoiding tunneling.However,it also leads to some corporate governance issues.It is not uncommon to observe‘goodwill impairment’2and‘business performance plunge’3after the target company‘meets the preset targets precisely’4during the commitment period.展开更多
文摘The performance commitment mechanism is widely used in capital operations in China’s A-share market.As of January 2025,88 percent of the companies listed on China’s A-share market have participated in some kind of performance commitment arrangement.1Theperformance commitment mechanism,developed and deeply rooted in Chinese markets and systems,has several distinctive features.It plays a positive role in solving the problem of information asymmetry,strengthening the market credit mechanism,and avoiding tunneling.However,it also leads to some corporate governance issues.It is not uncommon to observe‘goodwill impairment’2and‘business performance plunge’3after the target company‘meets the preset targets precisely’4during the commitment period.
