Gender equality's impact on female directors’ efficacy: A multi-country study

This paper studies the role of gender equality in female directors’ efficacy and its subsequent effects on firms. Female directors in more gender equal societies should possess greater skills and exert more influence due to better access to educational/professional opportunities and more amicable boardroom dynamics. Therefore, we hypothesize that gender equality serves as an important moderator in the relation between female board representation and firm outcomes. Using a multi-national panel comprising 1986 public firms from 24 countries or areas spanning from 2007 to 2016, we obtain results that firms with higher female board representation exhibit higher overall performance, less earnings management, and less excessive risk taking, in which all three relations are stronger in countries with greater gender equality. Taken together, our paper implies that the impact of female directors on firm outcomes depends on a country's overall level of gender equality.     

Tax incentive,R&D investment and firm innovation: Evidence from China

We estimate the effect of R&D tax incentives on firm-level R&D expenditures (RDE) and patenting using a change in the eligibility criteria for a super deduction in China. In 2006, the Chinese government relaxed the “10 % eligibility criterion”, which stated that only firms with a 10 % or higher increase in prior-year RDE can claim an additional 50 % tax deduction. We use an event study approach to show that firms that became newly eligible to claim the super deduction (those just below the criterion) catches up on RDE and product innovation measured by the sales of new products. In the long run, we also observe a closing gap in the number of patents between the two groups of firms. Moreover, extending tax benefits to all firm helps to lower the tax burden, and we find no evidence of manipulation and relabeling.     

技术型企业过往绩效对团队创新行为的影响：关系冲突的中介效应

基于IMOI模型，引入具备动态特征的“过往绩效”概念，利用长三角地区101个项目导向型研发团队问卷数据，依据社会信息处理理论和归因理论探讨过往绩效对团队创新行为的影响效果与内在机制。结果发现，过往绩效与团队创新行为显著正相关，关系冲突在过往绩效影响创新行为路径中起部分中介作用，并且关系冲突的中介机制在中国“人情”文化背景下能得到更好的解释；进一步，团队内部的恶意归因倾向在这一过程中发挥着调节作用。研究结果有助于从新视角探索技术型团队创新行为诱发机制，对双创背景下技术型企业创新管理实践具有一定参考意义。     

Related party transactions and firm value: The moderating role of corporate social responsibility reporting

This study investigates the influence of related party transactions (RPTs) on firm value. Further, it examines whether a firm’s corporate social responsibility (CSR) reporting reflects its corporate values and ethical concerns, therefore mitigating the value-destroying effects of RPTs. Based on 274 observations from publicly listed firms in Indonesia, our results show that RPTs (i.e., related party sales) are negatively related to firm value. Further, we find that in the presence of better CSR reporting, the relationship between RPTs and firm value becomes more positive. This is in line with the view that CSR reporting, which reflects firms’ ethical concerns, may serve as a mechanism against managers’ opportunism. However, we find that related party payables have a positive relationship with firm value. Further investigation reveals that, although certain RPTs show a short-term, value-enhancing effect, these transactions seem to result in subsequent tunneling activities, suggesting managerial opportunism in the long term.     

Credit constraints and productivity of SMEs: Evidence from Canada

To what extent firms are constrained by external credit is usually unobserved in commonly used firm-level data. We use a survey of financing among Canadian small and medium-sized enterprises to measure the likelihood of a firm being constrained by credit. We find that firm size, current debt-to-asset ratio and cash flow are robust indicators of being financially constrained, while long-term debt to asset ratio is not a significant indicator of credit constraints. We then estimate the firm-level total factor productivity, taking into account the measured credit constraints. Omitting credit constraints leads to an upward bias of productivity estimates, by 4 percent. In addition, we find no strong evidence that suggests credit constraints lead to slower productivity growth. Finally, we confirm that both investment and employment growth are negatively affected by the measured credit constraints.     

Does board gender diversity influence firm profitability? A control function approach

We investigate the relation between board gender diversity and firm profitability using the control function (CF) approach recently suggested by Wooldridge (2015). The CF method takes account of the problem of endogenous explanatory variables that have potential to bias the results. Using a sample of firms that made up the S&P 500 over the period 2004–2015, we find that the presence of women on corporate boards (measured either by the percentage of female directors on corporate boards or the Blau index of heterogeneity) has a positive and significant (at the 1% level) effect on firm profitability (measured by the return on assets). We compare our results to more traditional approaches (such as pooled OLS or the fixed-effects model). Through this study, we shed light on the effect of women on corporate boards on firm performance, as it is still a controversial issue (Post and Byron, 2015).     

The effect of minimum wage on firm markup: Evidence from China

Our paper examines the impact of minimum wage on firm markup in China. We find that minimum wage generates a positive effect on firm markup. More value-enhancing innovative activities, TFP improvement, and efficient labor resource allocation are the potential channels. Further, the positive influence of minimum wage is more pronounced for privately-owned firms, for firms with higher labor intensity and firms with less financial constraints. Besides, these findings are generally robust to different estimation methods. Our results provide new insights into understanding the channels through which labor regulation may cause the change of markup for the emerging markets countries.     

The provision of long-term credit and firm growth in developing countries

Do small and young firms benefit from an increase in the provision of long-term loans? By combining firm-level data from 62 countries (over the period 2006–2016) with a new database on short-term and long-term credit provided to the private sector, this article shows a higher provision of long-term credit does not stimulate growth of small and young firms. On the contrary, an increase in the availability of short-term credit spurs firm growth. The main explanation of this (counter-intuitive) result is the differential impact of short-term and long-term credit provision on small and young firms’ access to credit. Young and small firms are able to take advantage of an increase of short-term loans, which allow them to switch from informal finance to bank loans. However, a higher level of long-term credit does not alleviate credit constraints faced by opaque firms because these funds are allocated towards transparent borrowers.     

Relationship between city size and firm productivity – A new interpretation using the Chinese experience

This paper contributes to the literature on the relationship between city size and firm productivity by focusing on agglomeration, selection (market competition), and sorting (presence of firms with diverse productivity) effects using Chinese firm-level data for 1998–2013. Contrary to the existing literature, our parametric regression estimates from nearly two million firms show that when the selection effect is controlled, productivity advantage in big cities is reversed. This outcome is explained through a quantile regression showing the existence of left-sided sorting (inefficient firms sort themselves to larger cities) in big cities which is not captured in existing empirical literature. We further find that (1) left-sided sorting is stronger in exporters than non-exporters; (2) is also generated mainly in enterprises with high asset-liability ratios; and (3) selection has a positive effect on firm productivity, suggesting that market competition is key in an explanation of the rapid growth of big cities in China.     

Corporate Multinationality and Acquirer Returns

This paper provides evidence on how corporate multinationality from the perspective of acquiring firms relates to M&A returns. Using multivariate regressions and a large dataset of over 6,000 M&As (both cross-border and domestic) by UK firms during 1987 to 2014, the paper finds multinationality to be associated with significantly higher short-run announcement returns and long-run operating performance. While the multinationality premium (higher M&A returns for multinationals) persists over time, it seems to be restricted to firms with superior resource/managerial capabilities and minimal agency problems. Finally, the multinationality premium appears to be driven by foreign acquisitions into advanced economies. The results are robust to correcting for sample selection bias and controlling for several firm and deal characteristics, as well as accounting for firm-, industry-, and year-fixed effects. Collectively, the findings imply that multinationality could be a source of value creation for acquiring firms, particularly in foreign acquisitions, which tend to be complex, and, thereby, require superior managerial capabilities to succeed.