The impact of CEO compensation and excess reserves on bank risk-taking: the moderating role of monetary policy

Boateng, Agyenim; Nguyen, Vu Hong Thai; Du, Min; Kwabi, Frank

doi:10.1007/s00181-021-02086-4

Cited by 9 publications

(6 citation statements)

References 59 publications

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“…Some scholars have found that in the previous executive compensation arrangements of enterprises, executive compensation would be linked to performance, but it would lead to executives reducing the expenditure on innovation investment to meet the requirements of performance evaluation [63]. It is even possible to conduct earnings management behavior through innovation investment [64]. Because innovation investment is risky and has a long cycle, executives need to be mentally prepared to take risks for a long time and make sustained eforts.…”

Section: Discussionmentioning

confidence: 99%

“…It is worth noting that the threshold value of monetary compensation will be afected by the industry and economic development period. Monetary compensation is greatly afected by the industries and regions [64]. Terefore, after the existence of the monetary compensation threshold has been proved, scholars should further explore the diference in the monetary compensation threshold of senior executives in diferent industries and regions.…”

Section: Discussionmentioning

confidence: 99%

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The Differential Moderating Effect of Executive Compensation on Innovation Investment and Cash Holding Value in China

Zhang

Shao

Wang

2023

Discrete Dynamics in Nature and Society

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In the context of technological innovation promoting the long-term sustainable development of enterprises, how to better motivate senior executives to create greater value for an enterprise is being widely discussed. In particular, the COVID-19 outbreak has raised concerns about whether companies can deliver more value by holding large amounts of cash. However, although scholars have conducted a lot of research on topics such as innovation and firm value, how differentiated executive compensation incentives regulate the relationship between firm innovation and the value of cash holdings has hardly been explored. This paper selects the balanced panel data of 1470 A-share listed companies from 2012 to 2020 in China to explore the relationship between innovation investment, executive compensation, and the value of cash holdings. It is found that innovation investment has a positive impact on the value of the cash holdings. Based on Herzberg’s hygiene motivational factors, different types of executive compensation may have a hygiene effect or a motivational effect, which is different. As a result, the moderating effect of executive compensation on innovation investment and the value of cash holdings are significantly different. Executive equity compensation and in-service consumption are motivational attributes. They have a positive moderating effect on innovation investment and the value of cash holdings. The moderating effect of executive monetary compensation on innovation investment and the value of cash holdings changes with the change in monetary compensation. When monetary compensation is lower than the threshold value, monetary compensation is reflected as a hygiene attribute, so it has no significant positive moderating effect on innovation investment and the value of cash holdings. When monetary compensation is higher than the threshold value, monetary compensation is reflected as a motivational attribute, so it has a significant positive moderating effect on innovation investment and the value of cash holdings. Meanwhile, it is tested that monetary compensation is not manipulated by executive compensation defense behavior when it is reflected as motivational attributes.

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

The Differential Moderating Effect of Executive Compensation on Innovation Investment and Cash Holding Value in China

Zhang

Shao

Wang

2023

Discrete Dynamics in Nature and Society

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“…In contrast, not only did social finance and social consumption not rise in the same proportion during the same period, but both even declined, and medium-and long-term loans rose to a limited extent, well below the expectations of the top designers (Kuckertz et al, 2020). These macro indicators have shown that although China's monetary policy has continued to ease in order to stimulate the economy through the trough of the pandemic (Agur et al, 2019), the newly added money has clearly occurred in the financial sector idle phenomenon (Boateng et al, 2022), this monetary trap, if not broken in time, will only increase the overall social CPI, intensify the gap between the rich and poor, further damage the real economy, and fall into a vicious circle (Prasad, 2021). So our government in 2022 with unprecedented strength and tools to curb the rate of CPI rise, the latest CPI data is 1.6% (see Figure 3) (the CPI of major countries in Europe and the United States in the same period are above 5% (Hall et al, 2023), and even some months touched 10%) (Calinescu et al, 2023), the most typical is the price of pork occurred in a roller coaster of ups and downs, the pork cycle and debt cycle have occurred more obvious deformation leveling.…”

Section: Logicsmentioning

confidence: 99%

An Analysis of the Recovery Path of the Consumer Sector in the Post-Pandemic Era

Lyu¹,

Zhu²,

Ding³

et al. 2023

OJBM

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This paper proposes a referencable pattern of the recovery of the consumption sector, a new dimension to observe and evaluate the intrinsic value of the consumption sector, and proposes the concept of sensory-based consumption and the ranking of the weights of different categories; creates the concept of digital consumption index, coupled with digital RMB index and China-style digital economy index. Finally, we explain the internal logic of digital consumption as a consumption upgrade tool and a higher valuation target in the context of China's economic performance in 2022 and the Chinese government's policy in 2023, leading to the investment strategy of roller conduction effect.

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“…Reference [66] demonstrates that African banks are willing to take on greater risk when the monetary policy stance is expansionary, while ref. [67] illustrates that CEO compensation contracts and surplus reserves have a favorable and substantial effect on risk-taking and credit risk.…”

Section: Literature Reviewmentioning

confidence: 99%

Bank Risk Literature (1978–2022): A Bibliometric Analysis and Research Front Mapping

Marie

Abdelwahed

et al. 2023

Sustainability

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This study maps the conceptual structure of the body of knowledge concerning bank risk to understand this research strand better. A bibliometric analysis including 671 publications from January 1978 to October 2022 was conducted to achieve the aim of the study. The analysis of descriptive indicators identifies the main traits of scholars debating bank risk in terms of the annual production of publications; most productive authors, countries, affiliations, and journals; and most cited articles in the dataset. This study performs a co-word analysis by adopting social network analysis tools to analyze the conceptual structure of the dataset. The results highlight growing academic interest in bank risk research topics, especially following the global financial crisis. The bibliometric analysis reveals three main topics concerning the consideration of bank risk: (1) the adoption of risk management and bank risk, (2) the use of bank risk during the financial crisis, and (3) the interrelations between corporate governance and bank risk.

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The impact of CEO compensation and excess reserves on bank risk-taking: the moderating role of monetary policy

Cited by 9 publications

References 59 publications

The Differential Moderating Effect of Executive Compensation on Innovation Investment and Cash Holding Value in China

The Differential Moderating Effect of Executive Compensation on Innovation Investment and Cash Holding Value in China

An Analysis of the Recovery Path of the Consumer Sector in the Post-Pandemic Era

Bank Risk Literature (1978–2022): A Bibliometric Analysis and Research Front Mapping

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