CEO Accountability for Corporate Fraud: Evidence from the Split Share Structure Reform in China

Chen, Jiandong; Cumming, Douglas J.; Hou, Wenxuan; Lee, Edward

doi:10.1007/s10551-014-2467-2

Cited by 69 publications

(44 citation statements)

References 150 publications

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“…Corporate governance variables play important roles in predicting CEO dismissal (Chen, Cumming, Hou, & Lee, ). Research has shown analyst coverage (Wiersema & Zhang, ) and institutional ownership (Parrino, Sias, & Starks, ) can predict CEO dismissal; therefore, we control for analyst coverage and institutional ownership.…”

Section: Methodsmentioning

confidence: 99%

State ownership and securities fraud: A political governance perspective

Shi

Aguilera

Wang

2020

Corporate Governance

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Research question/issue This study attempts to shed new light on how the state as a controlling shareholder can affect the interests of minority shareholders by investigating the role of state ownership in deterring securities fraud commission. Research findings/insights Using archival data from a large sample of Chinese publicly traded firms, we uncover that state ownership is negatively associated with the likelihood of securities fraud commission. Further, CEO political background reinforces this negative relationship. We also uncover that firms with high state ownership are more likely to dismiss CEOs than those with low or no state ownership upon securities fraud detection. Theoretical/academic implications Departing from agency theory‐centric research on state ownership and corporate governance, this study introduces a political governance perspective to unpack the role of state ownership in corporate governance. Political governance refers to organizational control mechanisms deployed by political actors to achieve their objectives. Practitioner/policy implications Studying how political governance systems influence managerial behaviors is critical to gaining a complete insight into the implications of state ownership on corporate governance.

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Section: Methodsmentioning

confidence: 99%

State ownership and securities fraud: A political governance perspective

Shi

Aguilera

Wang

2020

Corporate Governance

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“…However, some studies report that investors and customers favour companies with state ownership, because state ownership is considered as an indicator that these companies have access to resources controlled by the state and may receive some support from the state when facing difficult situations (Ramírez and Tan, 2004;Spicer and Okhmatovskiy, 2015). This argument is supported by studies of CEO turnover in China, demonstrating that state-owned companies are reluctant to replace CEOs when corporate fraud is discovered (Chen et al, 2016;Cumming, Hou and Lee, 2011). The state often holds shares of companies to pursue goals of long-term economic development, and thus state investments represent a source of patient capital, especially in emerging economies (Musacchio and Lazzarini, 2014).…”

Section: Moderating Role Of Ownershipmentioning

confidence: 99%

Changing Corporate Governance in Response to Negative Media Reports

Okhmatovskiy

Shin

2018

British J of Management

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We study how organizations change their corporate governance in response to negative publicity in the media. We build on insights from the literature on interpersonal trust to theorize how organizations respond to different types of trust-damaging information. We suggest that organizations are likely to replace key individuals involved in the corporate governance process when trust-damaging information provides evidence of low integrity. In contrast, organizations are likely to make changes in how the governance process is organized when trust-damaging information provides evidence of low benevolence. We test our hypotheses by using data on publicly traded Korean firms from 2006 to 2013. Our results provide general support for our argument about corporate governance changes that organizations initiate in response to different types of trust-damaging information. We also explore how foreign ownership and state ownership moderate organizational responses to trust-damaging information.

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“…The papers in this special issue offer further evidence on related topics of the effect of fraud in China. Chen et al (2016b) audit firm in China due to a major audit failure. They find that the market shares and audit fees of these partners fell, and that these partners are less likely to be employed by other reputable audit firms.…”

Section: Corporate Fraudmentioning

confidence: 99%

Business Ethics and Finance in Greater China: Synthesis and Future Directions in Sustainability, CSR, and Fraud

2016

Self Cite

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Following the financial crisis and recent recession, the center of gravity of global economic growth and competitiveness is shifting toward emerging economies. As a leading and increasingly influential emerging economy, China is currently attracting the attention of academics, practitioners, and policy makers. There is a rise of research interest in and publications on issues relating to China within high-quality international academic journals. We therefore organized a The papers for the special issue were at the intersection of ethics and finance, and fit within one of three themes: environment and sustainability, corporate social responsibility, and fraud. Within these themes, issues of intellectual capital protection, gender equality, political connections, regional development, investor protection, corporate stewardship, trust and corruption, and corporate transparency each play a significant role. In this paper, we survey these studies and the related literature to provide a comprehensive coverage of business ethics and finance issues that affect China.

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CEO Accountability for Corporate Fraud: Evidence from the Split Share Structure Reform in China

Cited by 69 publications

References 150 publications

State ownership and securities fraud: A political governance perspective

State ownership and securities fraud: A political governance perspective

Changing Corporate Governance in Response to Negative Media Reports

Business Ethics and Finance in Greater China: Synthesis and Future Directions in Sustainability, CSR, and Fraud

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