Ownership, performance and executive turnover in China

Chi, Wei; Wang, Yijiang

doi:10.1016/j.asieco.2009.04.009

Cited by 31 publications

(16 citation statements)

References 58 publications

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“…Excess Control Rights and Turnover-Performance Sensitivity. Following Chi and Wang (2009) and Engel, Hayes, and Wang (2003), we estimate the following logistic regression to examine the effect of excess control rights on managerial turnover-performance sensitivity. H HARE…”

Section: Modelmentioning

confidence: 99%

Controlling Shareholder‐Manager Collusion and Tunneling: Evidence from China

Zhang¹,

Shenghao²,

Guan³

et al. 2014

Corporate Governance

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Manuscript Type: EmpiricalResearch Question/Issue: This study examines whether and how controlling shareholders collude with managers with respect to tunneling. Research Findings/Insights: Using data from Chinese listed companies, we find evidence consistent with the collusion hypothesis. Specifically, we find that the separation of control and cash flow rights is negatively associated with managerial pay-performance and turnover-performance sensitivity. These results suggest that controlling shareholders with excess control rights collude with managers by weakening performance-based incentives. Further evidence suggests that the negative relation between excess control rights and performance-based incentives is more pronounced in less profitable and less promising firms. We also find preliminary evidence for rent-sharing behavior between controlling shareholders and managers. Theoretic/Academic Implications: We incorporate the influence of managers into the agency framework between controlling and minority shareholders and suggest that controlling shareholders and managers expropriate the minority shareholders. We also propose that excess control rights undermine normal, effective, performance-based incentives and induce rent-sharing behavior between controlling shareholders and managers. Practitioner/Policy Implications: We advise firms' stakeholders, especially minority shareholders, to detect tunneling by observing executive incentives. We suggest that policy makers pay particular attention to the collusion between tunneling participants rather than merely prohibiting certain tunneling tactics. We also recommend that regulators strengthen corporate governance norms and improve the corporate governance environment.

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Section: Modelmentioning

confidence: 99%

Controlling Shareholder‐Manager Collusion and Tunneling: Evidence from China

Zhang¹,

Shenghao²,

Guan³

et al. 2014

Corporate Governance

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show abstract

“…Many categories of owner behave differently, according to their interests and preferences (Pederson and Thomsen, 2000 and Thomsen and Pederson, 2003). In emerging economies, owner identity is more important than ownership concentration (Dyck, 2000;Firth et al 2007;Omran et al 2008;Wu et al 2009 andChi and). We consider dummies proxies to distinguish three owner groups: family (CFAM), State (CSTA) and foreign investor (CFOR) such that:…”

Section: Divc= Votr1 -Casr1mentioning

confidence: 99%

“…We notice that these firms may be controlled by State, or family or even foreign investors. So we test if the corporate governance scheme depends on the shareholder's identity (in Chinese market, it is closely related to this identity, see among others Firth et al, 2007;Chi and Wang, 2009;Wu et al 2009). …”

Section: Introductionmentioning

confidence: 99%

Does Corporate Governance Affect Stock Liquidity in the Tunisian Stock Market?

Loukil¹,

Yousfi

2012

SSRN Journal

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Abstract:The aim of the current paper is to study the link between the effects of corporate governance on information asymmetry problems and stock liquidity in the Tunisian Stock Market. We use a sample of 49 Tunisian firms listed between 1998 and 2007. Our results show that corporate governance has direct and indirect effects on stock liquidity. Threat of expropriation exerted by family and foreign shareholders discourages reluctant investors, which decreases stock liquidity. In contrast, they invest their capital in State controlled firms.In fact, State is regarded as an effective controller rather than a shareholder. The State involvement in Tunisian firms is considered as state guarantee for investors, which increases stock liquidity. Our results provide evidence that some attributes of corporate governance improve stock liquidity because they reduce information asymmetry.

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“…In the change regression, the unobserved firm-specific characteristics drop out after first differencing. Third, before 2004, there was no data available for individual executive compensation, and hence Ke et al (2008) Our work also benefits from previous studies that have extensively investigated the relationship of executive pay or turnover to performance of A-share companies, such as Chi andWang (2009), Firth et al (2006a, b), Kato and Long (2006), Aivazian et al (2005), and Mengistae and Xu (2004). In methodology, we follow Kaplan (1994) who compared the sensitivity of top executive rewards to firm performance of Japanese companies with that of U.S. companies.…”

Section: Introductionmentioning

confidence: 73%

Are stronger executive incentives associated with cross-listing? Evidence from China

Chi

Zhang

2010

China Economic Review

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Abstract:This study examines whether firms incorporated in mainland China benefit from cross-listing in Hong Kong, China. The Hong Kong Stock Market has more stringent rules regarding corporate governance and a better system of investor protection than the mainland market. Hong Kong companies generally provide strong incentives to executives via equity-based compensation. Have cross-listed companies learned from Hong Kong firms about adopting these strong executive incentives? The evidence from this study suggests that changes in top executive compensation are more sensitive to sales growth in cross-listed firms than they are in mainland firms without cross-listing.However, compared to Hong Kong firms, cross-listed firms are less sensitive to stock returns. Further, this study shows that it is necessary to differentiate between state-owned companies and private companies, as cross-listing may have a greater impact on executive incentives in state-owned companies than it does in private companies.

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Ownership, performance and executive turnover in China

Cited by 31 publications

References 58 publications

Controlling Shareholder‐Manager Collusion and Tunneling: Evidence from China

Controlling Shareholder‐Manager Collusion and Tunneling: Evidence from China

Does Corporate Governance Affect Stock Liquidity in the Tunisian Stock Market?

Are stronger executive incentives associated with cross-listing? Evidence from China

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