**Table 1.** Constructing the Corporate Governance Index.


**Table 1.** *Cont.*

Note: The corporate governance index is made under the compliance and explanation statement rule.

#### *4.6. Ownership Concentration*

Large shareholders have a lot of stake in the company and can actively monitor the activities of the managers. The greater the degree of ownership, the more active the shareholders are (Kroll et al. 1993; Su et al. 2008; Li et al. 2008). Therefore, we measured ownership concentration as the percentage of shares held by the largest shareholder.

#### *4.7. Ownership Type*

We divided ownership type into two categories depending upon whether it was held by the state or by a non-state entity. State ownership was measured as the percentage share held by the state. Non-state ownership was defined as the percentage of shares held by non-state entities (Ding et al. 2007).
