大股东制衡机制与现金股利的隧道效应--来自1999-2003年中国上市公司的证据

鉴于公司的财务行为受到公司治理因素的影响,本文从公司治理的角度,基于国内外的相关研究提出六个研究假设,然后构建回归模型,依据1999年—2003年中国上市公司数据进行假设检验,具体探讨前五大股东持股比例以及在此基础上大股东之间的监督制衡机制对于上市公司派发现金股利的影响,研究因为我国股市“同股同权不同价”的特殊现象而导致的现金股利的“隧道效应”,探索其中的影响机制和制衡机制。研究显示,前五大股东的持股比例、大股东控制力(或联合控制力)、大股东制衡度(或联合制衡度)对派发现金股利的“隧道效应”存在重要影响。本文最后给出五点建议,试图限制控股股东通过现金股利的“隧道效应”谋取私利,以保护中小股东的正当权益。     

Looking good by doing good: CEO attractiveness and corporate philanthropy

We investigate the effect of male corporate managers' physical appearance—classified into unattractive, average-looking, and attractive—on the philanthropic decisions of Chinese listed firms. We find that compared to average-looking managers, those who rated as attractive do not engage more actively in corporate donations. On the contrary, the probability of donating is approximately 5% higher for unattractive managers than for average-looking managers; further, unattractive managers donate 95% more in charitable giving. To explain these findings, we propose a psychological channel through which physical appearance may influence male managers' charitable donations: Because altruistic behaviors may aggrandize individuals, managers conscious of deficits in their own physical attractiveness may engage in prosocial behavior to increase their attractiveness in the eyes of others. We find consistent evidence that the effect of managers' unattractiveness on philanthropic decisions is stronger in firms with weaker corporate governance; further, we find that the positive impact of corporate donation on financial performance observed in firms led by attractive and average-looking managers is substantially weaker in those firms led by unattractive managers.     

Do Shareholders Assess Managers' Use of Accruals to Manage Earnings as a Negative Signal of Trustworthiness Even When Its Outcome Serves Shareholders' Interests?*

We examine how shareholders' trust in managers is affected by (i) the outcome of earnings management (inconsistent vs. consistent with shareholders' interests) and (ii) the method of earnings management (accruals vs. real methods). Using a controlled experiment, we predict and find that trust is impaired when the outcome of earnings management suggests that managers have put their interests above shareholders' interests and/or when the method of earnings management suggests that managers misreported the firm's economic performance. We argue that shareholders assess managers putting their interests above shareholders' interests as a signal of untrustworthiness because it involves a transfer of the firm's resources away from shareholders to managers. We argue that shareholders also assess managers' use of accruals to manage earnings as a signal of untrustworthiness because, in this instance, managers misreport the firm's economic performance. Finally, we show that trust mediates the combined effects of the outcome of earnings management and the method of earnings management on investment decisions. Our study incrementally contributes to the literature by highlighting the adverse implications of managers' use of accruals to manage earnings even when its outcome serves shareholders' interests.     

When Is the Client King? Evidence from Affiliated-Analyst Recommendations in China's Split-Share Reform

China's split-share reform of 2005 (the Reform) converts the previously restricted shares held by founding shareholders to shares tradable on the open market. Against this backdrop, we study how underwriter-affiliated analysts and firms' large shareholders interact in the event of the latter's sales of restricted shares. We document that recommendations made by affiliated analysts are significantly more optimistic when firms' large shareholders plan to sell their restricted shares. This optimism, however, is associated with negative post-sale stock returns, suggesting large shareholders profit from share sales. Furthermore, large shareholders sell more restricted shares through the affiliated brokerages for which analysts have issued more optimistic recommendations and firms under their control are more likely to appoint such brokerages as lead underwriters when they refinance in the future. The affiliated analysts also conduct more site visits to the firms after the share sales, thereby improving their earnings-forecast accuracy. Our analysis shows how conflicts of interest by financial intermediaries arise following the Reform and lead to large shareholders' extraction of rents from public investors.     

China's Anti-Corruption Campaign and Financial Reporting Quality

We examine the impact of China's anti-corruption campaign on firm-level financial reporting quality (FRQ). As an important component of the anti-corruption campaign, in October 2013, “Rule 18” was issued to prohibit party and government officials from serving as directors for publicly listed firms. The regulation led to a large number of official directors resigning from their roles as directors involuntarily. As such, Rule 18 has effectively weakened, if not fully discontinued, the political connections of the firms that previously hired officials as directors. Our empirical analyses employ a difference-in-differences research design with firm fixed effects and propensity-score matching to examine the pre- and post-period FRQ around the enactment of Rule 18. We find that, compared to propensity-score-matched control firms, FRQ of firms with resigned official directors increases after Rule 18. Further evidence suggests that the impact is stronger when firms are located in regions with more developed financial markets and in regions with higher judiciary efficiency. We also find that the effect is more pronounced when firms are non-state-owned, received preferential credits, and face refinancing pressure.     

Financial Reporting Opacity and Expected Crash Risk: Evidence from Implied Volatility Smirks

The recent financial crisis has stimulated a renewed interest in understanding the determinants of stock price crash risk (i.e., left tail risk). Recent research shows that opaque financial reports enable managers to hide and accumulate bad news for extended periods. When the accumulated bad news reaches a certain tipping point, it will be suddenly released to the market at once, resulting in an abrupt decline in stock price (i.e., a crash). This study extends this line of research by examining the impact of financial reporting opacity on perceived or expected crash risk. Prominent economists, such as Olivier Blanchard, argue that removing the perception of tail risks (in addition to realized tail risks) is crucial in restoring investor confidence and stabilizing the stock market. Using the steepness of option implied volatility skew as a proxy for perceived crash risk, we find that accrual management, the presence of financial statement restatements, and auditor‐attested internal control weakness are all positively and significantly associated with the level of perceived crash risk. Our results suggest that improving financial reporting transparency is an important mechanism for firms and policymakers to reduce the perception of tail risks and stabilize the stock market.     

Corporate Tax Aggressiveness and Insider Trading

We examine the association between corporate tax aggressiveness and the profitability of insider trading under the assumption that insider trading profits reflect managerial opportunism. We document that insider purchase profitability, but not sales profitability, is significantly higher on average in more tax aggressive firms. We also find that the positive association between tax aggressiveness and insider purchase profitability is attenuated for firms with more effective monitoring and is accentuated for firms with a more opaque information environment. In addition, we provide empirical evidence that tax aggressiveness is significantly associated with greater insider sales volume in the fiscal year prior to a stock price crash. Finally, we find that the association between tax aggressiveness and insider purchase profitability weakens after the introduction of FIN 48, consistent with the increased transparency of tax positions under the new disclosure requirement reducing insiders' information advantage and hence their ability to profit from insider trading. To the extent that insider trading profits reflect managerial opportunism, our results are consistent with managers exploiting the opacity arising from tax aggressive activities to extract rent from shareholders, particularly those shareholders who sold their shares to the managers. Our findings are particularly important in light of the number of studies relying on the agency view of tax avoidance to develop arguments or to draw inferences.     

Flight to Quality in International Markets: Investors’ Demand for Financial Reporting Quality during Political Uncertainty Events

We examine whether international equity mutual fund managers shift their portfolios toward stocks with higher financial reporting quality (FRQ) during periods of high political uncertainty. Our study is motivated by two primary factors. First, prior research shows evidence of fund managers’ “flight to quality” (e.g., to less risky securities) during periods of uncertainty. Second, recent theoretical research concludes that stocks with higher FRQ are assessed as less sensitive to systematic risk (such as political uncertainty). We employ national elections as exogenous increases in systematic risk in the local markets and accordingly use an international sample of mutual funds that focus on local markets. We find that mutual fund managers shift their equity holdings to stocks with higher FRQ during election periods when political uncertainty is higher. Such a flight‐to‐quality effect is less pronounced for elections with larger expected electoral margins in the pre‐election period (i.e., when the incumbent is more likely to win the election) and for countries with higher transactions costs. In contrast, the effect is more pronounced when governments have greater involvement in the local economy. Our inferences are robust to alternative proxies for political uncertainty and FRQ and to numerous other sensitivity analyses.     

Auditor Choice and Its Implications for Group‐Affiliated Firms

We examine which of two opposing financial reporting incentives that group‐affiliated firms experience shapes their accounting transparency evident in auditor choice. In one direction, complex group structure and intragroup transactions enable controlling shareholders to pursue diversionary activities that they later hide by distorting reported earnings. In the other direction, as outside investors price‐protect against potential expropriation, controlling shareholders may be eager to improve financial reporting quality in order to alleviate agency costs. To empirically clarify whether group affiliation affects company insiders' incentives to address minority shareholders' concerns over agency costs, we examine auditor selection of group firms relative to stand‐alone firms. In comparison to nongroup firms, our evidence implies that group firms are more likely to appoint Top 10 audit firms in China, especially when their controlling shareholders have stronger incentives to improve external monitoring of the financial reporting process. After isolating group firms, we find that the presence of a Top 10 auditor translates into higher earnings and disclosure quality, higher valuation implications for related‐party transactions, and cheaper equity financing, implying that these firms benefit from engaging a high‐quality auditor. In additional analysis consistent with our predictions, we find that group firms that are Top 10 clients pay higher audit fees and their controlling shareholders are more constrained against meeting earnings benchmarks through intragroup transactions and siphoning corporate resources at the expense of minority investors. Collectively, our evidence supports the narrative that insiders in firms belonging to business groups weigh the costs and benefits stemming from auditor choice.     

Managers' Commitment to the Goals Contained in a Strategic Performance Measurement System*

A strategic performance measurement system (SPMS) is a set of causally linked nonfinancial and financial objectives, performance measures, and goals designed to align managers' actions with an organization's strategy. This study identifies and tests features unique to the cause‐effect structure of an SPMS likely to affect an important antecedent to managerial performance: goal commitment. Companies often set difficult goals for the multiple performance measures contained in an SPMS, but research shows difficult goals are significantly more likely to lead to performance gains if individuals are committed to achieving them. Two features central to the SPMS approach are predicted to affect goal commitment: (1) the strength of the cause‐effect links among the nonfinancial and financial performance measures contained in an SPMS and (2) managers' beliefs in their ability to achieve the SPMS nonfinancial goals. Results from an experiment conducted with experienced managers show both SPMS features have a positive effect on goal commitment.     

The Effect of Limited Liability on the Informativeness of Earnings: Evidence from the Stock and Bond Markets*

Previous empirical research on the informativeness of earnings has focused on stockholders, and has not examined differences in earnings' informativeness for stockholders and bondholders. Because stockholders are residual claimants and bondholders are fixed claimants, the informativeness of earnings should differ for these two types of investors. When a firm's default risk is low, changes in its financial condition should be of limited relevance to bondholders, but should be relevant to stockholders. In contrast, as the likelihood of financial distress increases, stockholders' limited liability allows them to abandon the firm to the bondholders (Fischer and Verrecchia 1997). Accordingly, as a firm's default risk increases, changes in its financial condition should be increasingly important to bondholders and less important to shareholders. Because earnings provide information on firm value, the stock return-earnings association should decrease as the firm's financial strength declines, while the bond return-earnings association should increase. We use two measures of a firm's financial strength: the firm's bond rating and its reporting of a loss. Consistent with our hypotheses, we find that the association between stock returns and changes in annual earnings decreases as bond ratings decline, while the association between bond returns and changes in annual earnings increases. These results suggest that as the company's financial condition deteriorates, earnings become less relevant for stock valuation and more relevant for bond valuation. When we partition firms based on their loss status, we find a stronger association between stock returns and annual earnings changes for firms with positive earnings (profit firms) than for firms with losses, consistent with earlier studies. In contrast, we find that the association between bond returns and earnings changes is greater for loss firms than for profit firms. These results suggest that losses reduce the informativeness of earnings for stockholders but increase informativeness for bondholders, suggesting that investors view losses as indicating increased credit risk.     

Home Country Investor Protection,Ownership Structure and Cross‐Listed Firms' Compliance with SOX‐Mandated Internal Control Deficiency Disclosures

We examine whether home country investor protection and ownership structure affect cross‐listed firms' compliance with SOX‐mandated internal control deficiency (ICD) disclosures. We develop a proxy for the likelihood of cross‐listed firms' ICD misreporting during the Section 302 reporting regime. For cross‐listed firms domiciled in weak investor protection countries, we have three main findings. First, firms whose managers control their firms and have voting rights in excess of cash flow rights are more likely to misreport ICD than other firms during the Section 302 reporting regime. Second, there is a positive association between the likelihood of ICD misreporting and voluntary deregistration from the SEC prior to the Section 404 effective date. Third, for firms that chose not to deregister, there is a positive association between the likelihood of ICD misreporting and the reporting of previously undisclosed ICDs during the Section 404 reporting regime. We do not find similar evidence for cross‐listed firms domiciled in strong investor protection countries. Our findings are consistent with the hypothesis that, for cross‐listed firms domiciled in weak investor protection countries, managers who have the ability and incentive to expropriate outside minority shareholders are reluctant to disclose ICDs in order to protect their private control benefits. The results of our study should be of interest to regulators who wish to identify noncompliant firms for closer supervision, investors who wish to identify ex ante red flags for poor financial disclosure quality, and researchers who wish to understand the economic forces governing cross‐listed firms' financial disclosure behavior.     

股票期权激励计划的披露与经理的机会主义行为

《上市公司股权激励管理办法》（试行）和《国有控股上市公司（境内）实施股权激励试行办法》出台后,经理股票期权作为一种激励机制有了法规的指导,但这种理论上激励相容的机制设计现实中可能由于经理人的机会主义行为而无效。文章以我国上市公司2006—2007年的经理股票期权激励计划首次披露事件为样本,分析了经理利用信息优势选择信息披露内容和时间影响股价,进而影响股票期权行权价格确定的机会主义行为,实证研究的结果验证了研究假设,借此提出对我国经理股票期权实施的借鉴意义。     

EBITDA and Managers' Investment and Leverage Choices

EBITDA is a commonly used performance measure for (i) valuation, (ii) debt contracting, and (iii) executive compensation. The widespread use of EBITDA by stakeholders may induce managers to focus their attention on EBITDA. Since EBITDA excludes various expenses, managers who fixate on EBITDA may underweight the excluded expenses when determining their firms' investments in capital and leverage levels. I find that managers who fixate on EBITDA overinvest in capital and overlever their firm relative to their industry peers. These results are robust to alternative proxies for managers' focus on EBITDA and alternative specifications. I also find that firms whose managers focus on EBITDA have weaker operating performance, which is attributed to higher depreciation expense. My primary proxy for managers' focus on EBITDA is whether they choose to disclose EBITDA in annual earnings announcements. I find that the use of EBITDA in setting executive compensation, the prevalence of EBITDA estimates by analysts, and the use of EBITDA‐based covenants in firms' debt contracts are all positively associated with the propensity to disclose EBITDA in earnings announcements. I find weaker evidence of opportunistic motives explaining EBITDA disclosure. These results are consistent with managers disclosing EBITDA to portray to investors that it is a metric they seek to maximize. Overall, this study suggests that while EBITDA is a widely used metric, there is a systematic cost to using this measure—it provides managers with incentives to overinvest in capital and to acquire excessive debt.     

When Does Pre‐IPO Financial Reporting Trigger Post‐IPO Legal Consequences?

Prior research suggests that the fear of litigation precludes most managers from manipulating earnings in the initial public offering (IPO) setting. Yet, managers' restraint is perhaps unwarranted: research has not yet linked instances of aggressive pre‐IPO reporting to increased litigation risk. This paper investigates when aggressive IPO reporting triggers legal consequences. Examining 2,037 IPOs, we find that even when ex post evidence indicates the presence of earnings inflation, litigation is more likely to occur when investors have relied on the suspect earnings during the pricing process. Why might investors rely on some firms' abnormal accruals when valuing the IPO and yet discount the abnormal accruals of other firms? Our analyses suggest that IPO investors incorporate abnormal accrual information into IPO prices in situations where accruals are more likely to reflect information and where other sources of information to help investors make pricing decisions are lacking or are less reliable. In these situations, we find that abnormal accruals do positively correlate with future performance, validating investors' use of this information when pricing these offerings. Yet, when ex post performance reveals that these pre‐IPO abnormal accruals were in fact inflated, we find that litigation emerges to allow harmed shareholders to recover losses incurred dating back to the pricing process—importantly, investors are only harmed if they used those abnormal accruals in pricing the IPO. Collectively, our evidence indicates that litigation in response to earnings inflation does indeed surface in the IPO setting—but only when investors need it to settle the score.     

Cancellation of Executive Stock Options: Tax and Accounting Income Considerations*

Canadian firms face a trade‐off between reporting higher accounting income and paying lower taxes that arises from their ability to cancel in‐the‐money executive stock options and making a substitute cash payment to the executive instead of issuing shares. Firms' trade‐off hypotheses are operationalized in a multilateral framework and empirically tested using insider‐trading data. The multilateral approach is designed to control for the incentive effects of alternative compensation schemes and to determine the cancellation payment that keeps the executive indifferent between receiving cash or shares. The results show that firms consider both taxes and financial reporting costs in determining their option cancellation behavior.     

Outside Blockholders' Monitoring of Management and Debt Financing

Corporate governance mechanisms designed to alleviate manager‐shareholder agency conflicts can worsen shareholder‐bondholder conflicts. This study examines how one such corporate governance mechanism, monitoring by large outside shareholders, influences the choice between public and private debt. I conjecture and find that firms with higher outside blockholdings are inclined to choose bank loans over public debt when they borrow, consistent with the notion that banks are better monitors than public debt markets. I also find that bank loans carry less price protection than corporate bonds against increased agency risk associated with outside blocks. Corroborating the monitoring story, I document that bank loans contain more accounting‐based covenants and dividend restriction provisions for firms with higher outside blockholdings than for those with lower blockholdings. I find no such relation for public debt covenants. This supports that banks' monitoring of their loans counters the agency risk caused by blockholders. This study extends prior research that associates governance mechanisms with agency costs of debt, by incorporating lenders' differential monitoring mechanisms in the overall corporate governance system.     

金融资产配置与股价信息含量

股价信息含量作为资本定价效率的重要体现，其对于抑制"脱实向虚"实现金融服务实体经济起着关键作用。文章着眼于我国企业大量配置金融资产这一现实，探究了其对股价信息含量的影响。基于2007-2017年中国A股上市公司数据的实证检验表明：金融资产具有"盈余管理"功能，管理层可能出于"盈余管理"动机配置金融资产，恶化公司信息环境，最终降低了股价信息含量。具体而言，企业通过操纵金融资产确认类别、公允价值估值及终止确认等方式达到盈余管理目的。当公司盈余管理动机较为强烈时，金融资产对股价信息含量的降低作用更加明显。完善的法律体制及有效的内部治理有助于缓解两者之间的负向关系。文章结论为我国企业持有金融资产提供了新解释，揭示了"脱实向虚"作用于实体经济的路径，同时丰富了会计政策选择的经济后果，为推动我国会计准则改革具有一定的启示意义。     

Readability of 10‐K Reports and Stock Price Crash Risk

This study shows that less readable 10‐K reports are associated with higher stock price crash risk. The results are consistent with the argument that managers can successfully hide adverse information by writing complex financial reports, which leads to stock price crashes when the hidden bad news accumulates and reaches a tipping point. Cross‐sectional analyses show that the effect of financial reporting complexity on crash risk is more pronounced for firms with persistent negative earnings news or transitory positive earnings news, greater chief executive officer stock option incentives, or lower litigation risk. Finally, accrual manipulation appears to be positively related to crash risk, even since the Sarbanes‐Oxley Act, if the manipulation is accompanied by complex 10‐K reports.     

Abnormal Accruals and Managerial Intent: Evidence from the Timing of Merger Announcements and Completions

We examine acquiring managers' opportunistic reporting behavior around stock‐for‐stock acquisitions. Using the timing of merger announcements and completions to infer managerial intent, we show that acquirers with the most inflated earnings tend to announce mergers on Fridays, and that they manage earnings several quarters before the merger announcement date. Friday announcers exhibit a stronger negative association between pre‐merger announcement abnormal accruals and post‐merger announcement market performance than non‐Friday announcers. This effect is driven mainly by mergers that are completed relatively quickly after they are announced. Overall, the evidence supports the notion that some acquiring managers inflate earnings prior to announcing the mergers, and time the merger announcements to exploit investor inattention.