Oxford University Press's
Academic Insights for the Thinking World

  • Author: Fuxiu Jiang

Review of Finance

The horizontal agency problem and how China deals with it

Economies cannot grow unless they have well-functioning stock markets. Up until now, China was a striking exception to this rule. However, for China’s growth to continue, it recognizes that a well-functioning stock market must play a major role. Therefore, two important questions are the following. First, what is the nature of the agency problem in China? Second, what is the potential solution to this problem?

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