This study analyzes corporate ownership as a corporate governance mechanism and its role in creating firm value. Previous research shows that there is no convergence on the firm-value corporate ownership relationship. Most research in this area takes a cross national approach ignoring the uniqueness of each institutional setting particularly those of emerging nations. Using a unique firm level dataset, we investigate how corporate control nature and ownership concentration affect the value of Chinese listed firms. First, non-state owned control is associated with a higher Tobin’s Q while a negative premium is found for state owned. Using the hybrid and the correlated random effects model we confirm a U-shaped non-linear relationship between ownership concentration and Tobin’s Q, implying that firm value first decreases and then increases as block holders own more shares. Further investigation reveals that the negative effect of ownership concentration is weaker when a firm equity nature is non-state owned enterprises (non-SOEs) compared to state-owned enterprises (SOEs). While ownership concentration appears to be an efficient mechanism for corporate governance its effect is weaker for SOEs compared to non-SOEs. The results support privatization of SOEs, sound reforms such as the split share structure reform as crucial for the development of China’s stock market.
Purpose The purpose of this paper is to examine the relationship between tax evasion, political/public corruption and increased taxation in Zimbabwe’s small and medium-sized enterprises (SMEs). Design/methodology/approach The study as a descriptive survey used questionnaires and interviews as research instruments for collecting data. Findings The findings revealed that most SMEs are no longer paying some form of taxes as expected since the Government of Zimbabwe through the Ministry of Finance and Reserve Bank of Zimbabwe introduced the 2% tax levy on all bank electronic transactions greater than US$10 from October 2018. Originality/value The paper recommends that the government should create an independent anti-corruption committee with strong monitoring and regulatory mechanism so as to fight political/public corruption; hence, creating a paradigm of trust and confidence among different economic players. Lastly, the tax authorities should engage all the key economic players when crafting the country’s tax laws/rates so as to promote a sense of equity, equality and economic transparency among citizens.
Purpose This study aims to examine the significance of public/political corruption; trade tax revenue (import and export) on tax evasion in a group of 140 countries for the period 2008–2017. Sampled countries were subsequently grouped into four clusters for further testing. With the increase in globalization and technology, there is a potential of increased tax corruption on trade tariffs revenue activities. Design/methodology/approach The empirical testing was carried out using the technical and more advanced dynamic two-step system-generalized moment method. The econometrical method solves the problem of autocorrelation and heteroskedasticity on cross-sectional data. This study used the data from World Bank, Transparency International, World Economic Forum and Kaufmann’s governance indicators. Findings There is statistical interaction between the corruption perception index (CPI) and international trade activities. Moreover, other results revealed that CPI and trade tax revenue activities are statistically insignificant to tax evasion in three groups; low corrupt countries, high corrupt and trade surplus countries although the coefficient signs remain consistent. This can be attributed by a low level of corruption in the low corrupt countries or concealment of corruption-related information in high corrupt countries and the low level of import evasion in trade surplus countries. Originality/value Based on the theory and results, public and political officials should promote good corporate governance by strictly monitoring trade revenue activities because parties involved can use technical criminality to conceal illegal behavior. Additionally, all jurisdictions should apply the economic theory of crime, especially in high political corrupt countries and perennial trade deficit countries because key macroeconomic tax revenue activities such as imports invite numerous forms of dishonesty.
As corporations expand, the owners (principals) delegate managers (agents) to manage their wealth on their behalf. Ceding the management authority to others means shareholders must institute mechanisms that keep their interests aligned with those of managers. One of such corporate governance mechanism that helps with the interest alignment goal is the compensation of Chief Executive Officers (CEOs). Although there are some previous studies on CEOs' compensation, results from these studies are mixed. Most corporate governance studies suffer from endogeneity problems. Resultantly, the current study uses the dynamic panel system generalized methods of moments (SGMM) estimator to examine the moderation effect of SOE reforms on the nexus between firm performance and CEO compensation using a sample of 1265 non-financial public limited companies on the China Stock Market from 2010 to 2016. The result from the study shows that both current and past firm performances positively influence executive compensation contracts. Although the Renewed Mixed-Ownership Reform was launched at the 18th National Congress of the Chinese Communist Party in 2012, its influence on executive compensation began to have material effect after issuing the operational guidelines in 2015. State ownership continued to decrease but remaining high only in strategic sectors. Finally, the extensive reforms positively influenced state ownership as an important governance mechanism in CEO compensation contracts after 2015.
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