Can the exit threat of non-controlling major shareholders promote corporate innovation?

Xu, Chaohui; Xu, Yingjie; Li, Feng’en

doi:10.1080/09537325.2021.1931673

Cited by 12 publications

(8 citation statements)

References 38 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The legal basis for the 3% threshold is that the Company Law of the People's Republic of China stipulates that the minimum equity holding ratio for shareholders to enjoy the right to make provisional proposals is 3%. Second, from the practical perspective, considering that the top 10 shareholders with relatively high shareholding ratios and high exit threat capabilities are effective participants in corporate governance (Chen et al, 2006; Xu et al, 2022), the relationship between the shareholding ratio of the top 10 shareholders and the threshold can be used as the basis for determining the threshold. Common thresholds include 1%, 3%, and 5% (Du et al, 2021; Zhang, Pan, & Lv, 2022), and the ranking position distribution of shareholders at these three thresholds is shown in Table 1.…”

Section: Methodsmentioning

confidence: 99%

See 1 more Smart Citation

Multiple shareholding institutional investors and green governance of heavy‐polluting industries

Lyu,

Zhang,

et al. 2024

Bus Strat Env

View full text Add to dashboard Cite

Green governance in heavily polluting industries is crucial for achieving sustainable economic growth. By analyzing Chinese A‐share listed companies from these industries between of 2010 and 2021, we assess the influence of multiple shareholding institutional investors (MSII) on a company's environmental performance. We find that MSIIs can improve environmental performance, highlighting their positive role in green governance. Further analyses reveal that this green influence stems from three key effects: supervisory oversight by principal shareholders, managerial incentives, and knowledge transfer. Consistent with the risk‐averse hypothesis, our study also suggests that MSIIs could drive the green transformation of heavy‐polluting industries out of risk aversion.

show abstract

Section: Methodsmentioning

confidence: 99%

“…Additionally, the threat of shareholder exit serves as a lever to fortify MSII's governance rights (Xu et al, 2022). If minority shareholders choose to leave due to compromised interests, it sends a detrimental signal to the market, potentially causing a drop in the company's stock price and adversely affecting the firm.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Multiple shareholding institutional investors and green governance of heavy‐polluting industries

Lyu,

Zhang,

et al. 2024

Bus Strat Env

View full text Add to dashboard Cite

show abstract

“…Firstly, blockholder has the right to propose candidates for director board and senior executives. By supervising the behavior of the senior executives, blockholder can affect the company's strategy, including its innovation strategy (Xu et al, 2021). Secondly, through the exit threat, blockholder may not only increase the possibility of the senior executive being forced to change but also increase the possibility of a company being acquired (Parrino et al, 2003).…”

Section: Relation To Existing Literature and Hypotheses Developmentmentioning

confidence: 99%

Heterogeneous Blockholders and Enterprise Innovation: Evidence From the Mixed-Ownership Reform in China

Xia,

Ling,

Liu

2023

SAGE Open

View full text Add to dashboard Cite

The mixed ownership reform of China is a kind of further partial privatization for the listed state-owned enterprises (SOEs), and an opportunity for non-state-owned enterprises (non-SOEs) to expand their commerce boundaries. The purpose of this paper is to investigate the effect of heterogeneous blockholders on corporate innovation. Spanning the analysis with listed companies in China from 2007 to 2017, we find that heterogeneous blockholders have a significant positive effect on enterprise innovation. Lowering agency costs and improving corporate innovation efficiency are the two plausible mechanisms. From further research, we find that compared with non-SOEs, the positive effect of heterogeneous blockholders on enterprise innovation is more pronounced for SOEs, and the effect is more positive with the improvement of relative power balance between heterogeneous blockholders. The paper sheds light on the innovation effects of mixed-ownership reform in emerging and transitioning countries. JEL Classification: G32, M13, D23, G34

show abstract

“…The SLS with higher ownership has the authority to request the convening of extraordinary shareholders' meetings or directly appoint directors or executives to participate in the operation and management of the firm, and actively participate in corporate governance through "voting with hands" [11,12]. Even if the direct influence through "voting with hands" is ineffective, the SLS can also act as a "bargaining chip" with the controlling shareholder by threatening to sell their ownership stakes [13][14][15]. Even when both methods fail, the SLS can finally achieve self-rescue by "voting with their feet" [16,17].…”

Section: Introductionmentioning

confidence: 99%

Two tigers cannot live on the same mountain: The impact of the second largest shareholder on controlling shareholder’s tunneling behavior

2023

View full text Add to dashboard Cite

Under the current corporate governance model, the second largest shareholder (SLS) is a very special, common and important presence, which becomes an important counterweight to the controlling shareholder (CS). Through a game matrix, this paper explains whether the SLS will supervise the CS’s tunneling behavior. Based on this, we empirically examine the effect of the SLS on CS’s tunneling behavior in Chinese listed firms between 2010 and 2020. The results indicate that the SLS significantly inhibits CS’s tunneling behavior. In addition, the heterogeneity analysis reveals that the negative effect of the SLS on CS’s tunneling behavior is concentrated in non-state-owned enterprises (NSOEs) and enterprises located in regions with better business environment. This paper provides a reference for resolving the current "conflict of interest" among multiple large shareholders (MLSs), as well as evidence to support the governance role of the SLS in listed firms with MLSs.

show abstract

Can the exit threat of non-controlling major shareholders promote corporate innovation?

Cited by 12 publications

References 38 publications

Multiple shareholding institutional investors and green governance of heavy‐polluting industries

Multiple shareholding institutional investors and green governance of heavy‐polluting industries

Heterogeneous Blockholders and Enterprise Innovation: Evidence From the Mixed-Ownership Reform in China

Two tigers cannot live on the same mountain: The impact of the second largest shareholder on controlling shareholder’s tunneling behavior

Contact Info

Product

Resources

About