Financial Architecture and Corporate Performance of Chinese Companies

In this paper we research the influence of financial architecture on corporate performance based on the sample of 2231 public traded Chinese non-financial companies that published reports from years 2013 - 2016. Using cluster analysis based on the Elbow and Silhouette methods four clusters of companies were identified. By analyzing the cluster dynamics we locate the most efficient cluster and study the characteristics that are responsible for its sustainable growth. The panel regression confirms the results from clustering and provides both general and cluster- specific insights on how each component of the financial architecture casts its impact on firm performance. This paper expands the scope of studies on financial architecture by bringing in additional evidence from the Chinese sample, and provides market insights to both management and investors regarding factors that affect the performance of Chinese companies.