Institutional monitoring,coordination and corporate acquisitions in China

Within the context of corporate acquisition decisions of China’s Publicly Listed Corporations (PLCs), this paper investigates the monitoring and coordination behaviour of institutional shareholders. Institutional shareholders are divided into four groups: large outsider, large insider, small outsider and small insider. The outsider and insider categorization, respectively, represents the absence of significant business links with relevant PLCs. In China, institutional shareholders tend to either monitor the acquisitions decisions of PLCs or coordinate their response with the controlling shareholders (coordination in the present context amounts to cooperation). Using micro data from China’s stock market over the 2003–2008 period, we find that (through ex-ante coordination with the controlling shareholders) the insider institutional investment tends to increase the likelihood of PLC acquisitions. However, through ex-ante monitoring of the PLC acquisition offers, the outsider institutional investment tends to decrease the acquisition likelihood. We find that, through ex-post monitoring of PLC acquisitions, institutional investors with large shareholdings can help improve the post-acquisition performance of Chinese PLCs. On the other hand, institutional investors with small shareholdings tend to coordinate their actions with the controlling shareholders. Accordingly, small institutional shareholders cannot affect the post-acquisition performance of China’s PLCs. Finally, we find that the so-called ‘cherry-picking effect’ exists only in the case of large outsider institutional investors.     

Risk aversion,public disclosure,and partially informed outsiders

In this paper, we examine the impact of public disclosure and partially informed outsiders on a risk-averse insider’s trading behavior, market efficiency, and market depth. In our model, under disclosure requirements, except for the final auction, market depth is the same at every auction. When informed outsiders are risk-neutral, in contrast to the case of a risk-averse insider with no informed outsiders, the insider is more concerned about the uncertainty about future price risk. When the number of informed outsiders increases, market liquidity improves, and the insider increases the variance of her random component to conceal her trading strategy. However, since the insider is relatively more risk-averse, she pays less attention to doing this on her own. Besides, the order flow provided by informed outsiders and randomly added by the insider injects additional liquidity into the market. When informed outsiders are risk-averse, compared to risk-neutral informed outsiders, an insider is most concerned about trading risks brought by informed outsiders at the beginning of trading. Furthermore, whether the trader is an insider or informed outsider, the more risk-averse trader has lower expected profits. Moreover, outsiders’ greater risk aversion leads to a smaller market depth.     

Friend or foe? Employee ownership and CEO dismissal

This paper examines 2 research questions. First, does the level of employee stock ownership impact the likelihood of dismissing poorly performing chief executive officers (CEOs)? Second, does the level of employee stock ownership affect the likelihood of appointing an outsider or an insider after the dismissal of an incumbent CEO? We suggest that employee stock ownership reinforces the firm performance—CEO dismissal link because employee shareholders' welfare consisting of fixed claims (wages, bonuses, etc.), residual claims (dividends, increase in stock value, etc.), and human capital (generic and idiosyncratic) are highly linked to their firm performance. Moreover, under conditions of poor performance, employee shareholders are likely to favor an outsider CEO because he or she is more likely to initiate and implement drastic changes to the strategy of the firm, and therefore, he or she is more likely to improve firm performance. Drawing on a longitudinal sample of French firms, we find that employee stock ownership strengthens the negative relationship between firm performance and CEO dismissal likelihood. We find also that the higher employee ownership, the more likely that the underperforming CEO is replaced by an outsider. In contrast, employee ownership has no moderating impact on the likelihood of insider CEO appointment.     

Wage drift and minimum contractual wage: Theoretical interrelationship and empirical evidence for Italy

A two-stage wage setting process whose outcomes are identified in the wage drift, at the local level, and in the tariff wage, at the central level, is analyzed. The impact of insider and outsider factors in each stage of the bargaining process is investigated both theoretically and empirically for Italy. In the light of its extreme policy relevance, particular attention is devoted to the analysis of the interrelationships between the wage drift and the tariff wage. Panel data estimation carried out on a sample of 105 Italian three-digit industries and 41 contract groups, reveals that: (1) Insider factors (productivity, inventories and the insider workers power) are important determinants of the wage drift while outsider factors (aggregate wage and unemployment) have a prominent role in determining the tariff wage. (2) Wage drift and tariff wage are closely interrelated.     

Board Composition and Organizational Performance: Two Studies of Insider/outsider Effects

This paper presents two studies that examine the commonly held belief that corporate boards are more likely to have positive effects on organizational performance when composed of outside directors. The first study – a meta-analysis of 63 correlations – indicates that, on average, the greater presence of outsiders is associated with higher performance, but so too is the greater presence of insiders. Instead of providing evidence of a positive outsider effect, these results suggest the existence of a curvilinear homogeneity effect in which performance is enhanced by the greater relative presence of either inside or outside directors. The second study – a hierarchical polynomial regression analysis of data from 259 large US companies – confirms the existence of a curvilinear relationship between insider/outsider composition and performance measured as return on assets.     

INSIDERS AND OUTSIDERS IN UNION MODELS

Abstract. This paper examines the importance of distinguishing between 'insiders'and 'outsiders'in models of union-firm bargaining. In general, insiders are those workers already established in the firm, while outsiders are either unemployed or working in temporary, low-security jobs. Modifying traditional union models to take account of this distinction is straightforward in one-period models, where the union is assumed to be indifferent to the welfare of outsiders, but is much more complicated in dynamic models. Some of the predictions of insider-outsider models concerning wage rigidity and unemployment are not robust. However, the prediction that wages will depend on both insider and outsider forces is robust and appears to be supported by the empirical evidence. Furthermore, evidence from the U.S. suggests that insider power should not be viewed as a purely union phenomenon.     

THEORETICAL FOUNDATIONS FOR STICKY WAGES

Abstract. The paper compares three different types of theoretical explanation of 'sticky'wages. They are implicit contracts, efficiency wage models and insider/outsider models. It then reconsiders Keynes'rationale for sticky wages, which focuses on relative wage issues. Finally, the paper considers possible directions for future research.     

业绩预告下的股份减持与内幕交易——会计稳健性是遏制还是助力？

选取2010—2018年沪深A股上市公司为样本,考察业绩预告发布前后大股东是否存在以及如何利用自身信息优势进行股份减持交易,会计稳健性是否以及如何对该内幕交易产生影响。研究结果表明:与强制性业绩预告相比,自愿性业绩预告披露前后发生大股东减持的概率更高,并且会计稳健性会显著抑制自愿性业绩预告披露前后的大股东减持行为。进一步将业绩预告消息区分为好消息和坏消息之后研究发现:坏消息的利空程度越高,大股东在业绩预告之前进行股份减持的规模越大;或者好消息的利好程度越高,大股东在业绩预告之后减持的规模也越大;稳健的财务信息能够抑制公司在隐匿坏消息方面进行的内幕交易,但会加剧公司在隐匿好消息方面进行的内幕交易。     

Insider trading in a two-tier real market structure model

This paper investigates the real and financial effects of insider trading in the spirit of Jain and Mirman (2000). Unlike the existing literature, the production of one real good is costly and depends mainly on the price of an intermediate good produced locally by a privately owned firm. The results show that the output level of the final good chosen by the insider as well as the price of the intermediate good set by the privately owned firm are both higher than it would be in the absence of insider trading. Furthermore, the parameters of both real markets affect the stock price. Next, a second insider, operating in the firm producing the final good, is added to the benchmark model. Competition among insiders decreases the production of the final good by the publicly owned firm and the price of the intermediate good with respect to the benchmark model. Moreover, it affects the insiders’ trades and increases the amount of information revealed in the stock price.     

Cournot duopoly and insider trading with two insiders

We study the effect of competition among insiders in an extension of the static Kyle [Kyle, A. (1985). Continuous auctions and insider trading. Econometrica, 53, 1315–1335] model of insider trading introduced by Jain and Mirman (JMC) [Jain, N., & Mirman, L.J. (2002). Effects of insider trading under different market structures. The Quarterly Review of Economics and Finance, 42, 19–39]. In the JMC model competition in the real sector is introduced. In this paper we introduce competition in the stock sector in the JMC model by assuming that there is a manager who is responsible for making the real decisions of the firm as well as an ‘owner’ who has the same information as the manager but has no managerial responsibilities. In this way we can study the interaction between competition in the real sector and competition in the financial sector. We show that the stock price set by the market makers reveals more information than in the JMC model and that the expected equilibrium values of the manager’s profits sometimes decline and sometimes increase depending on the exogenous parameters of the model. Moreover, we prove that due to the competition in the financial sector, the level of output produced by the firm is less than in JMC. Finally, we also study the effect of financial competition in the case in which the market makers receive only one signal and analyze the comparative statics in this case.     

Hip‐Hop as Urban and Regional Research: Encountering an Insider's Ethnography of City Life

This essay suggests that hip‐hop music may reasonably be thought of as a form of urban and regional research. The essay draws upon a recently published book by hip‐hop artist Jay‐Z, which provides biographical information alongside translations of the lyrical content of his works, to show that hip‐hop is full of insider ethnographic insights into urban life. This, it is argued, can be thought of as an answer to Daryl Martin's call for a more ‘poetic urbanism’, an urbanism that captures the material, sensory and emotional aspects of the city. The essay uses Jay‐Z's text to illustrate the type of insights and ideas that we might obtain from hip‐hop, giving some specific examples of these insights and concluding with some reflections upon this alternative insider account of city life — and how it might provide us with opportunities for expanding our repertoire.     

信息披露与内部人股票交易获利策略——以六起内部人股票交易为基础的案例研究

本文以近期A股市场内部人股票交易活跃的六家公司为例,通过考查信息披露与内部人股票交易间的关系,解释内部人股票交易的获利策略。研究发现,在允许内部人交易本公司股票的情况下,信息披露与内部人股票交易关系密切,内部人存在利用私有信息和策略性信息披露两类获利策略。信息权力是内部人股票交易的获利基础,公司业绩是影响内部人股票交易获利策略选择的重要因素,而法律诉讼风险并没有对我国内部人股票交易和信息披露产生明显约束作用。这些发现对完善我国资本市场内部人股票交易行为规范具有一定借鉴意义。     

The Resource Dependence Role of Corporate Directors: Strategic Adaptation of Board Composition in Response to Environmental Change

Most research on corporate directors has focused on two roles: agency and resource dependence. While these two roles are theoretically and practically distinct, previous research has used the same classification scheme for measuring board composition regardless of role examined. Our paper examines the resource dependence role of directors and posits that the widely used insider/outsider categorizations do not adequately capture this role of directors. A taxonomy of directors is presented specifically for studying the resource dependence role. We then apply the taxonomy to a sample of US airline firms undergoing deregulation, and examine how board composition changes parallel the changing resource dependence needs of the firms. We conclude that the board's function as a link to the external environment is an important one, and that firms respond to significant changes in their external environment by altering board composition.     

Do Managers Trade on Public or Private Information? Evidence from Fundamental Valuations

Using accounting-based (residual income) valuations, this study examines the extent to which abnormal returns after insider share trades are explained by private information versus mispricing of public information. For a sample of insider trades in the Netherlands (1999–2008), I find that managers' share purchase decisions are associated with positive future abnormal returns as well as equity undervaluation. Even though undervaluation results in predictable price increases, positive abnormal returns following purchases persist after controlling for fundamental valuations. Thus, this study provides evidence on the sources of managers' personal trading gains and suggests that positive abnormal returns after insider share purchases reflect both private information and managers' responses to market mispricing of public information.     

Filtration enlargement-based time series forecast in view of insider trading

This survey reviews filtration enlargement models in view of insider trading. Although filtration enlargement aptly models insiders' informational advantage, the theoretical results have not attracted the attention of the empiricists, owing mainly to the lack of a bridge transforming the results to testable hypotheses, and/or the absence of econometrics method linking the hypotheses and the data. This survey provides a feasible avenue to estimate insider information and to detect trading from a relatively sophisticated theoretical model, where the dynamics of publicly available data (e.g., stock price) implies insider information before the information is completely digested. We complete the survey with an empirical illustration based on simulated data.     

重大事件披露、股价异常波动与内幕交易——基于重大信息披露违规公司的经验证据

规范化的信息披露是证券市场正常运转的基石。本文利用重大事件披露违规公司研究信息披露违规背后是否存在股价异常波动与内幕交易现象，并将样本公司按照处分类型和公司类型分类检验。研究表明，总体样本公司的股票存在显著的内幕交易行为，并呈现出牛市背景下的新特征：受到公开谴责的公司股票内幕交易程度显著高于受到公开处罚的公司股票，ST公司股票的内幕交易程度显著高于非ST公司股票。     

A New Strategy Against Hostile Takeovers: A Model of Defense in Participations

This article examines the efficacy of a ‘defense in participations’ policy consisting of competitors acquiring cross‐equity participations within the same industry to prevent hostile takeovers. This defense in participations strategy provides disincentive for raiders as partial ownerships increase market power of competitors and then reinforce the ‘outsider effect’. Also, we find conditions for a general result, which state that takeovers are less profitable in an industry with participations rather than in an industry without any capital links. We provide information to regulators about the positive social impact of cross participations in the context of mergers and expose an economic dilemma between a ‘laissez‐faire’ and an interventionist approach. Copyright © 2016 John Wiley & Sons, Ltd.     

Managing organizational entry in China: the roles of newcomer–supervisor exchange,incumbent support,and perceived insider status

The socialization literature has long recognized the important role of perceived insider status in facilitating newcomer adjustment, but knowledge on how to cultivate this desirable psychological state is limited. This study examines newcomer–supervisor exchange as an antecedent of perceived insider status of newcomers, which in turn facilitates their social adjustment and task mastery during organizational entry. We also explore incumbent support as a boundary condition for these effects. We conducted a survey study on 320 new employees and 92 supervisors in China. This study revealed that newcomer–supervisor exchange was related positively to newcomers’ perceived insider status, and perceived insider status mediated the positive relationships of newcomer–supervisor exchange with social adjustment and task mastery. In addition, incumbent support moderated the positive relationship between newcomer–supervisor exchange and perceived insider status, as well as the positive mediated relationships of newcomer–supervisor exchange with social adjustment and task mastery through perceived insider status. Specifically, these relationships were weaker when incumbent support was higher. Theoretical and practical implications were discussed.     

会计信息失真与内部人控制:一个博弈分析框架

会计信息失真一直是困扰会计学界的重大问题。本文认为会计信息失真与现代公司治理结构的主要缺陷——内部人控制直接相关。在给定理论前提的框架下,本文从股东与内部人博弈的角度分析了这种相关性,并在此基础上给出了简要的治理思路。