Managerial Overconfidence,Self-Attribution Bias,and Downwardly Sticky Investment: Evidence from Korea

The extant literature on behavioral corporate finance has explored the effects of overconfidence on investment–cash flow sensitivity (ICS) to explain overinvestment, yet it has overlooked the asymmetric behavior of investments in relation to changes in cash flow levels. This study examines whether investments behave asymmetrically responding to changes in cash flows and, if so, how managerial overconfidence affects asymmetric ICS. Using a sample of KOSPI and KOSDAQ firms in Korea, we find the incidence of downwardly sticky ICS in unconstrained firms. We then find that overconfident managers encourage ICS to be stickier than their rational peers do in unconstrained firms. Finally, we find that managerial overconfidence intensified by self-attribution bias induces ICS to get even stickier, suggesting more explicit evidence of corporate investment distortions. The results of alternative tests using the asymmetric models of Homburg and Nasev (2008) are qualitatively consistent with prior results. Overall, our findings imply a higher incidence of excessive investment commitments driven by overconfident managers.     

Risk-managed industry momentum and momentum crashes

This paper investigates Barroso and Santa-Clara’s [J. Financ. Econ., 2008, 116, 111–120] risk-managed momentum strategy in an industry momentum setting. We investigate several traditional momentum strategies including that recently proposed by Novy-Marx [J. Financ. Econ., 2012, 103, 429–453]. We moreover examine the impact of different variance forecast horizons on average pay-offs and also Daniel and Moskowitz’s [J. Financ. Econ., 2016, 122, 221–247] optionality effects. Our results show in general that neither plain industry momentum strategies nor the risk-managed industry momentum strategies are subject to optionality effects, implying that these strategies have no time-varying beta. Moreover, the benefits of risk management are robust across volatility estimators, momentum strategies and subsamples. Finally, the ‘echo effect’ in industries is not robust in subsamples as the strategy works only during the most recent subsample.     

Finding good relationships – intended and realized relational governance of international fine wine exchanges

Changes in relational governance have mainly been documented in the form of relationship building, developments and repairs related to tensions, or break-ups of otherwise strong relationships. In this paper, we take a closer look at the relational governance of long-distance international exchanges between producers and importers of fine wine. We contribute by providing evidence for several novel relational governance changes, and we document portfolio effects on governance choices. Fine wine producers and importers intend on relational governance for most of their international exchanges, but they may end up being terminated, relegated to market governance, or settle as incomplete relationships.     

The impact of direct environmental,social, and governance reporting: Empirical evidence in European-listed companies in the agri-food sector

Companies are continuously pressured for the dissemination of environmental, social, and governance (ESG) information, because of the constant debate on the issue of corporate sustainability, considered a critical and very important topic for society; despite this pressure, ESG's disclosure practices vary considerably from company to company, both in quantity and quality. The study aims to address the issue and verify the effectiveness of ESG reporting through the influence that the ESG disclosure has on profitability and value of listed European agri-food companies. The results obtained, studying a sample of 57 European-listed companies (EU28) in the agri-food sector observed in the period 2010–2018, show that the ESG disclosure practices of the companies impact corporate profitability; specifically, evidence is provided for the existence of a positive relationship between profitability and disclosure practices of strictly environmental and social information and a negative effect between company market value and disclosure practices relating to governance. These results suggest that greater transparency and accountability help to improve business profitability.     

External regulation,independent director attendance,and governance effects

In this study we examine how the regulation of director attendance disciplines directors’ behavior, and consider the governance effect of such regulations. This examination exploits the differences between the requirements for director attendance at board meetings enacted by the Shanghai Stock Exchange (SHSE) and by the Shenzhen Stock Exchange (SZSE). Using a difference-in-differences model with a sample of A-share listed firms from 2006 to 2017, we document that the rate of meeting attendance by independent directors who serve with firms listed on the SHSE (SHIDs) has increased significantly since the exchange’s enforcement of the regulation on attendance. This positive effect has been more pronounced for independent directors with legal backgrounds. Further investigations find that the regulation of attendance plays a corporate governance role through the mechanism of enhanced monitoring. The attendance regulation increases the SHIDs likelihood of casting dissenting votes, and it leads to both better accounting performance and higher firm value. In addition, SHIDs are more likely to depart from firms listed on the SHSE, and to transfer their directorships to firms listed on the SZSE, which has a less constraining attendance requirement. Our findings provide evidence of how external regulation shapes director attendance and voting behavior in emerging markets.     

Product line transformation,foreign sales,and firm value: Evidence from COVID-19 pandemic governance in urban China

Using a sample of Chinese firms, we examine stock market reaction to firms that announce a change in their product lines to those related to COVID-19 management (medical masks and ventilators, among others). We find the market reacts positively to the announcements. In addition, when a firm ordinarily has a large share of export sales, the stock market reaction is more salient, indicating that export sales provide a certification effect that positively signals investors. Additional analysis on moderating effects suggest that, conditional on foreign sales, prior experience with medical product lines or less uncertainty about supply availability enhances the cumulative announcement returns (CARs), while the adverse impact of firm size on CAR magnifies.     

Media coverage and investment efficiency

We examine the effect of media coverage on firm-level investment efficiency. We find that media coverage reduces under-investment but increases over-investment. The negative effect of media coverage on under-investment is more pronounced in firms affected by greater information asymmetry and poorer corporate governance. The positive effect of media coverage on over-investment is driven by media-induced CEO overconfidence. Additional results show that both investment- and non-investment-related news coverage decrease under-investment, while non-investment-related news coverage is more influential in increasing over-investment. In general, higher news optimism is associated with less under-investment but more over-investment. Moreover, media coverage affects investment efficiency through its information dissemination rather than information creation function. Collectively, our results suggest that firms’ media visibility promotes more over-investment than under-investment.     

森林食品产业减贫的作用机理及效应分析

首先,介绍森林食品产业减贫的作用机理,主要包括解决资源落后与发展滞后的矛盾;促进贫困地区收入增长;注重多方交流互动。其次,将森林食品产业的减贫效应分为社会减贫效应、经济减贫效应、生态减贫效应这3个部分。最后,提出加强基础设施建设与品牌宣传;增加产业联动效应;持续带动地区增收等建议,以期为政府相关部门制定政策提供决策依据。     

Examining the extent of and determinants for sustainability assurance quality: The role of audit committees

This study examines the extent of and determinants for sustainability assurance quality. Data comprise sustainability assurance statements published by the top 100 listed companies in Australia and New Zealand from 2017 to 2019. The findings indicate that Australian companies lead their New Zealand counterparts in sustainability assurance. Although sustainability reporting has risen, assurance rates remain significantly low. Accountants dominate the market, and companies prefer to use their own auditors for sustainability assurance work. Sustainability assurance quality is poor and does not vary significantly among Australian and New Zealand companies. Low-quality sustainability assurance plays a limited role in mitigating potential stakeholder–agency conflicts. The regression analysis indicates that audit committee characteristics such as members' independence, industry/market expertise, and attending meetings enhance sustainability assurance quality, whereas audit committee size has no affect. These findings suggest that audit committee characteristics such as independence, industry expertise, and regular meeting attendance have the potential to reduce stakeholder–agency conflicts by improving the quality of sustainability statement assurance. Our findings build on the sustainability assurance literature by exploring current trends in sustainability assurance practices in Australia and New Zealand where corporate governance codes have been recently revised. Further, these findings are timely given recent changes in standards (International Standard on Assurance Engagements [ISAE] 3000 and Global Reporting Initiative [GRI]). Our study contributes to the audit committee literature and sheds light on the role played by audit committee characteristics on sustainability assurance statement quality. The study findings potentially offer useful insights for practitioners, standard setters, and regulators.     

新时代背景下创建党建引领基层社会治理新模式的探索——以兰州市城关区为例

随着我国社会发展的不断推进与创新,对于执政基础的巩固、在最大限度内保证党的执政能力等均成为使基层党建可以获得良好效果的主要手段,并且使工作在不断的实践探索中获得更好的成效。但是,以党建引领基层社会治理的过程仍然存在众多问题,其中包括形式化严重以及做表面功夫等。因此,如何在新时代的背景下,通过党的全面领导将党与群众紧密地联系在一起,从而确保党建工作可以在基层发挥更强的社会治理职能,已成为基层社会治理模式探索并创新的主要内容。