Institutional investors' corporate site visits and pay-performance sensitivity

Wu, Wenxin; Zhang, Xuezhi; Zhou, Zixun

doi:10.1016/j.pacfin.2022.101875

Cited by 15 publications

(2 citation statements)

References 49 publications

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“…The literature suggests that IC positively affects firms' profitability through increased incentive capabilities [10][11][12] in developed and developing economies. Some researchers have studied IC for firms operating in different countries and industries and found that IC performs a crucial role during the pandemic [13][14][15][16].…”

Section: Introductionmentioning

confidence: 99%

Intellectual Capital and a Firm’s Sustainable Performance and Growth before and during the COVID-19 Crisis: A Comparative Analysis of Small and Large European Hospitality Firms

Ashraf

Sadiq²,

Ferreira

et al. 2023

Sustainability

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This study explores the critical role of intellectual capital (IC) in ensuring the sustainable performance and growth of European hospitality firms, both large and small, during the unprecedented COVID-19 crisis. Based on an extensive analysis of data from 42,516 accommodation, food, and travel sector firms operating in 18 EU countries during 2012–2021, this research provides crucial insights into the differential impacts of human, structural, and relational IC on profitability and asset growth. The results show that human IC positively affects SMEs’ profitability, while relational IC benefits both small and large firms. On the other hand, structural IC negatively impacted asset growth for both SMEs and large firms before the crisis but had no impact during the crisis. This study offers crucial insights for policymakers, investors, and business leaders alike, emphasizing the importance of investing in human and relational IC as key drivers of sustainable growth and profitability in the hospitality industry. The findings of this study will help firms better navigate the challenges and uncertainties of crises, such as COVID-19, ensuring their long-term viability and success.

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Section: Introductionmentioning

confidence: 99%

Intellectual Capital and a Firm’s Sustainable Performance and Growth before and during the COVID-19 Crisis: A Comparative Analysis of Small and Large European Hospitality Firms

Ashraf

Sadiq²,

Ferreira

et al. 2023

Sustainability

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show abstract

“…Therefore, information generated by institutional investors through SVs helps enhance the monitoring and governance ability of institutional investors and inhibits ICFS. Second, the randomness and continuity of SVs can help institutional investors form long-term, effective supervision of the companies being visited, increases the probability of discovering management’s opportunistic behaviors, and thus restrains management’s self-interest motivated investment behaviors [ 57 ]. Due to the elevated pressure of continuous monitoring by institutional investors and increased rent-seeking costs, management may be inclined to make investment decisions that are consistent with the interests of the principal, which will also alleviate the conflicts of interest between shareholders and management and inhibit ICFS.…”

Section: Theory and Hypothesismentioning

confidence: 99%

Institutional investors’ site visits and investment-cash flow sensitivity: Mitigating financing constraints or inhibiting agent conflicts?

Liao,

Zhan,

Yuan

2024

PLoS ONE

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Taking Chinese non-financial A-share companies listed on the Shenzhen Stock Exchange (SZSE) between 2003 and 2018 as a sample, this paper empirically examines whether and how institutional investors’ site visits (SVs) affect corporate investment-cash flow sensitivity (ICFS). The results show that institutional investors’ SVs can reduce ICFS, and this effect is more obvious for companies with fewer investment opportunities, larger sizes, higher internal cash flows, and higher agency costs, indicating that institutional investors’ SVs primarily inhibit ICFS caused by agency conflicts rather than financing constraints. In addition, the inhibitory effect of institutional investors’ SVs on ICFS exists mainly in companies with poor internal supervision governance and weak executive compensation incentive mechanisms, indicating that institutional investors’ SVs and other forms of corporate governance mechanisms operate as substitutes in reducing ICFS. This paper reveals the important role of institutional investors’ SVs in reducing ICFS, with important theoretical and practical implications for regulators to progressively regulate and promote this form of investor activity.

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Birds of the same feather: CEO-CFO surname ties and corporate accounting information comparability

Ren,

Zhong

2024

Rev Manag Sci

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Institutional investors' corporate site visits and pay-performance sensitivity

Cited by 15 publications

References 49 publications

Intellectual Capital and a Firm’s Sustainable Performance and Growth before and during the COVID-19 Crisis: A Comparative Analysis of Small and Large European Hospitality Firms

Intellectual Capital and a Firm’s Sustainable Performance and Growth before and during the COVID-19 Crisis: A Comparative Analysis of Small and Large European Hospitality Firms

Institutional investors’ site visits and investment-cash flow sensitivity: Mitigating financing constraints or inhibiting agent conflicts?

Birds of the same feather: CEO-CFO surname ties and corporate accounting information comparability

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