股权激励、代理成本与企业投资效率

将股权激励、所有权结构、代理成本与投资效率纳入一个统一的分析框架,使用产权属性作为调节变量,代理成本作为中介变量,实证检验股权激励是否影响投资效率,以及股权激励、所有权结构、代理成本与投资效率之间的关系。结果表明:股权激励能够抑制上市公司的非效率投资,代理成本的中介效应显著,但所占比重很小,非国有企业的抑制作用大于国有企业,非国有企业的中介传导机制畅通;国有企业"期权激励"方式能够显著抑制非效率投资,非国有企业的非效率投资通过实施"股票激励"方式能够得到显著抑制;实施股权激励计划能够显著抑制上市公司的投资不足,非国有企业的抑制作用大于国有企业,非国有企业的代理成本中介效应机制畅通,国有上市公司的代理成本中介效应不显著。     

抑制代理成本提升公司价值了吗？——来自沪、深两市非金融类A股上市公司的经验证据

以沪、深两市非金融类A股上市公司2005～2009年的混合数据为研究对象，运用双变量回归（bivariate regression）、复回归（multiple regression）及协方差回归（ANACOVA）等计量方法，实证考察权益代理成本与公司价值间的关联性。研究结果表明，当权益代理成本降低时，我国上市公司的市场价值（托宾Q值）和财务业绩（ROA）均得到显著提高；且在引入内外部监督机制、管理层激励机制及股权结构特征三重约束后，二者的反向关联性仍维持稳定。此结论为代理成本理论增添了新的经验证据，即提升上市公司自身价值，保障投资者权益的有效途径之一就是降低代理成本。     

Venture Capitalists, Syndication and Governance in Initial Public Offerings

This paper examines the development of effective boards in venture capital (VC)-backed initial public offerings. It argues that VC-backed IPOs suffer from two sets of agency costs which are related to principal–agent and principal–principal relationships between the founders and members of the VC syndicate. Using a unique sample of 293 entrepreneurial IPOs in the UK it shows that VC syndicates invest in relatively more risky firms. VC-backed IPOs have more independent boards than IPOs with no VC involvement, with board independence being higher in syndicated VC-backed firms. These results are consistent with assumption that these governance factors are used to mitigate agency costs associated with VC involvement in IPO firms. We also find that in syndicated IPOs there is a higher equity presence of passive private equity firms investing alongside VC firms.     

Audit quality in common-law and code-law emerging markets: Evidence on earnings conservatism, agency costs and cost of equity

This study focuses on firms that are audited by a big auditor and examines the differentiation in the earnings management potential and the level of conservatism. It also investigates whether being audited by a big auditor would lead to lower agency costs and lower cost of equity. The study focuses on emerging common-law South Africa and code-law Brazil, and seeks to identify whether there are material differences given their dissimilar institutional characteristics. The study reports that even though firms may be audited by high quality auditors, their institutional differences influence significantly firms' earnings conservatism, agency costs and cost of equity. Client firms of big auditors in both common-law South Africa and code-law Brazil exhibit lower discretionary accruals. The study has found evidence of more conservative earnings for South Africa but insufficient levels for Brazil. For common-law South Africa, the presence of effective corporate governance mechanisms reduces agency costs. For code-law Brazil, the corporate governance mechanisms generally display an insignificant impact on reducing agency costs. For common-law South Africa, firm-level performance, growth and market determinants tend to lead to a lower cost of equity. For code-law Brazil, it is found that significant discretionary accruals, market beta and analyst forecast dispersion would result in higher uncertainty and would consequently raise the cost of equity.     

Effects of family ownership and management on small business equity financing

Equity financing is important in financing growth but its special features in small business have not been well addressed in the finance or entrepreneurship literature. Since many small firms have family involvement and research shows that family firms have both advantages and disadvantages in managing agency costs, how family involvement and agency issues interact to affect equity financing in small business is an important topic of research. This study examines the effects of family ownership and management on two dimensions of small business equity financing, the use of equity financing and the use of public equity financing within the agency theory of financing. The results show that family involvement and agency issues interactively and separately influence equity financing in small business.     

Founding Family Firms,CEO Incentive Pay,and Dual Agency Problems

This paper contributes to the literature on agency theory by examining relations between family involvement and CEO compensation. Using a panel of 362 small U.S. listed firms, we analyze how founding families influence firm performance through option portfolio price sensitivity. Consistent with the dual agency framework, we find that family firms have lower CEO incentive pay, which is further reduced by higher executive ownership. Interestingly, such incentive pay offsets the positive impact that families have on firm valuation. Collectively, our results show that, compared with nonfamily firms, lower incentive pay adopted by family firms due to lower agency costs mitigates the direct effect of family involvement on firm performance. Once accounting for CEO incentive pay, we do not observe performance differences between family and nonfamily firms.     

Owner as Manager,Extended Horizons and the Family Firm

Previous work on firm ownership structure suggests that organizations in which ownership and control are combined may be undervalued relative to the market investment rule because decision makers have an incentive to forgo investment projects that managers in firms with specialized ownership find profitable. However, the specialization of ownership and decision-making functions may result in substantial agency costs. This paper shows that these tradeoffs may not exist in family firms. The extended horizons characteristic of family businesses may provide the necessary incentives for decision makers to invest according to the market rule while limiting agency costs that arise when ownership and control are separated. Family ties, loyalty, insurance, and stability are expected to be effective in lengthening the horizons of managers and in providing the incentives for family managers to make efficient investments in the family business.     

The Relationship between Family Firms and Corporate Governance*

This paper contributes to the agency theory literature by identifying relations between family control and corporate governance structure. Emerging literature supports the notion that family control creates strong incentives that have potentially competing influences on the manner in, and extent to, which internal corporate governance mechanisms are utilized. A sample of 100 listed companies (evenly divided between family and nonfamily firms) is used to test the hypotheses that corporate governance structures are different between family and nonfamily firms; and that family firms adopt optimal corporate governance structures. This research finds evidence that suggests that family firms utilize substantially different corporate governance structures from nonfamily firms and that these differences lead to performance differentials. Indeed, results suggest that family control creates, rather than negates, agency costs and future research may be well rewarded by pursuing this latter notion further.     

Who pays for switching costs?

Earlier work characterized pricing with switching costs as a dilemma between a short-term “harvesting” incentive to increase prices versus a long-term “investing” incentive to decrease prices. This paper shows that small switching costs may reduce firm profits and provide short-term incentives to lower rather than raise prices. We provide a simple expression which characterizes the impact of the introduction of switching costs on prices and profits for a general model. We then explore the impact of switching costs in a variety of specific examples which are special cases of our model. We emphasize the importance of a short term “compensating” effect on switching costs. When consumers switch in equilibrium, firms offset the costs of consumers that are switching into the firm. If switching costs are low, this compensating effect of switching costs causes even myopic firms to decrease prices. The incentive to decrease prices is even stronger for forward looking firms.     

Why do companies issue convertible bond loans? An empirical analysis for the Canadian market

To identify issuer motives, we study the determinants of announcement effects of convertible debt issues in the Canadian market. Classified into equity‐ and debt‐like, wealth effects are significantly more negative for equity‐like convertible bond issuers. Equity‐like convertibles are significantly negatively affected by agency costs of equity. However, agency costs of debt have no significant effect on debt‐like convertibles. Consistent with Stein (1992), this suggests convertibles in particular represent a substitute for equity. Moreover, convertible debt offers announced by income trusts experience significantly less negative wealth effects than offers by nontrusts—a finding explained by a more debt‐like convertible design, very low agency costs of equity in case of income trusts, or both. Copyright © 2008 ASAC. Published by John Wiley & Sons, Ltd.     

The Impact of Financing Constraints and Agency Costs on Corporate R&D Investment: Evidence from China

This study investigates the association between financing constraints/agency problem (agency costs) and corporate R&D investment in China by using the two‐tier stochastic frontier model initially developed by Kumbhakar and Parmeter (2009) in light of the Euler equation analysis framework. The results show that there is a significantly negative association between financing constraints and firms' R&D investments and a significantly positive relationship between agency costs and R&D investments. Thus, financing constraints lead to R&D underinvestment, while agency costs cause R&D overinvestment by the sample firms. However, government subsidies have a positive moderating effect on the relationships. The impact of financing constraints and agency costs on R&D investment varies slightly by firms in different geographical regions, industries, business ownerships, and years.     

Capital Structure Choices and Taxes: Evidence from the Australian Dividend Imputation Tax System

The introduction in 1987 of a dividend imputation tax system in Australia represented a significant change to the tax framework. To the extent that tax incentives influence the use of debt financing, changes in tax laws that alter these incentives will lead to changes in corporate capital structures. This paper examines the changes in corporate capital structure around the introduction of a dividend imputation tax system. The introduction of dividend imputation provides an incentive for firms to (a) reduce the level of debt financing utilized where this incentive varies across firms depending on the firm’s effective corporate tax rate, and (b) increase the level of external equity financing. The results present evidence consistent with these incentives.     

The Impact of Public Support on SMEs' Outward FDI: Evidence from Italy

This paper evaluates the impact of public financial support to the internationalization of small and medium enterprises. We analyze the growth performance of firms that conducted outward foreign direct investments in the period 1994–2008, comparing firms that benefited from public support (380) with a sample of firms that also internationalized their activity in the same period but without any incentive (508). The econometric results, stemming from a two‐step treatment effect model, reveal that incentives are effective in enhancing firms' performance in terms of domestic turnover and productivity growth, especially when they are targeted at smaller and younger firms. Moreover, the effect of the incentives is enhanced for firms that have accumulated international experience.     

Equity Agency Costs Amongst Manufacturing SMEs

The principal objectives in this paper are to assess and to build upon the recently published research of Ang et al. (2000) making a pioneering attempt to estimate equity agency costs in a large cross-sectional sample of smaller, non-publicly traded companies in the United States. The present research employs panel data for 871 manufacturing SMEs legally organised as proprietary companies, taken from the Australian federal government's Business Longitudinal Survey conducted over four financial years from 1994–1995 to 1997–1998. The two proxies for equity agency costs that are trialed – operating expense ratio and asset turnover ratio – both appear lower in more complex agency relationships. It is also found that greater enterprise growth is significantly more evident amongst SMEs with more complex agency relationships. Thus, it is possible that observed differences in values for the two equity agency cost proxies are not the direct consequence of differences in management and ownership structures; but, rather, of differences in the experience of enterprise growth, possibly enabled to some degree by the management and ownership structures adopted. This raises the question of whether, in fact, operating expense ratio and asset turnover ratio can be reliably used as proxies for equity-related agency costs in SME research.     

Revisiting the Effect of Family Involvement on Corporate Social Responsibility: A Behavioral Agency Perspective

This paper sheds light on the incongruent findings concerning the relationship between family involvement and firms’ corporate social responsibility (CSR). While prior studies have mainly taken the perspective of families’ socioemotional wealth preservation, we approach this relationship from the perspective of behavioral agency theory, highlighting the important role played by CEOs’ family memberships. Specifically, we posit that family firms are more likely to invest in CSR when their CEOs are members of the controlling families. Furthermore, we examine how family firms can employ long-term incentives to encourage non-family CEOs to act in the interests of the controlling families to preserve SEW and thus enhancing family firms’ CSR performance. We tested our hypotheses using hand-collected data of family firms included in the S&P 500 index, in the period of 2003–2010. The empirical findings support our hypotheses that (a) family firms with family members as the CEOs have better CSR performance and (b) family firms tend to provide a high level of long-term incentives to non-family than family CEOs. In addition, long-term incentives strongly motivate CEOs to improve firms’ CSR performance, regardless of their family memberships.     

What Does CEOs’ Pay-for-Performance Reveal About Shareholders’ Attitude Toward Earnings Overstatements?

If overstatements were a symptom of the agency conflict, pay-for-performance sensitivities should have increased in response to the additional penalties for misreporting imposed by SOX. Our finding of their decrease is inconsistent with the view that overstatements were an unintended consequence of incentive pay prior to 2002. To corroborate our interpretation, we show that (i) CEO pay-for-performance sensitivities are higher among firms whose shareholders stand to benefit from overstatements; (ii) this cross-sectional relationship weakens significantly after SOX; and (iii) the within-firm decrease in pay-for-performance sensitivity is most pronounced among firms with high pre-SOX shareholder benefits from overstatements.     

Managerial Incentives and Investment Policy in Family Firms: Evidence from a Structural Analysis

This paper provides evidence that CEO incentive pay mediates the effect of family preferences on corporate investment policy. Our study focuses on the option portfolio volatility sensitivity vega, which motivates the risk‐taking behavior of undiversified managers. After controlling for factors that affect incentive pay and investment policy simultaneously, we find that one‐third of underinvestment in riskier R&D projects in active family firms can be attributed to a significantly lower vega. Passive family firms allocate more capital to R&D as opposed to active family firms, and are more active in M&A deal making. In contrast to many prior studies, pay incentives and families are not associated with capital expenditures. Overall, our empirical results suggest that CEO pay incentives induce investment policy contingent on firm risk. Family CEO incentive pay manifests the family preference for lower risk, especially in firms with higher firm risk. Nonetheless, after replacing family CEOs with outside professionals, investments in both R&D and M&A increase, which is consistent with the family preference for extended investment horizons. Interestingly, such a preference seems not to be manifested in incentive pay.     

Capital Structure,Management Ownership and Large External Shareholders: A UK Analysis

This paper examines empirically the effects of management ownership and ownership by large external shareholders on the capital structure of the firm from an agency theory perspective. The paper extends the US literature on the topic by examining the effect of interactions between management ownership and ownership by large external shareholders on the capital structure of UK firms. For a sample of UK firms, the paper provides empirical evidence that suggests the debt ratio is positively related to management ownership and negatively related to ownership by large external shareholders. Furthermore, the presence of a large external shareholder acts to negate the positive relationship between debt ratios and management ownership; in the presence of a large external shareholder, no significant relationship between debt ratios and management ownership exists. These findings are consistent with the hypothesis that the presence of large external shareholders affects the agency costs of debt and equity.     

An Investigation on Incentive Strategies in Community Building in Business-to-Business Electronic Markets

ABSTRACT

Purpose: Community building is recognized as an important governance mechanism in business-to-business (B-to-B) electronic markets by enhancing firms’ participation in these platform markets. However, little research has been done regarding the role of incentive strategies in community building. The main purpose of this paper is to understand how to motivate merchants to participate in a merchant community with incentive strategies.

Methodology: Data were collected in a community of a large B-to-B electronic platform market in China. We randomly chose a sample of 605 participants from among all merchant firms registered in this community, and track their behaviors for 2 weeks. Their behaviors are recorded based on our research design.

Findings: With the empirical analysis from a community of a large B-to-B electronic platform market in China, our results show that (1) both platform and peer incentive strategies can significantly enhance community participation, while platform incentives is more effective in general; (2) platform incentive strategy is a more effective strategy as seller firm uncertainty increases; (3) peer incentive strategy is a more effective strategy as buyer firm uncertainty increases.

Originality: This paper is among the first to investigate two types of incentive strategies in community building, platform level and peer level. We also investigate the moderating role of market uncertainties due to market participants from seller and buyer when examining the effectiveness of these two incentive strategies.     

Venture capitalists at work: A diff-in-diff approach at late-stages of the screening process

In this paper we use a new methodology aimed at identifying only the venture capitalists (VC) treatment effect: we compare a representative sample of firms financed by private VC in the period 2004–2014 with a sample of firms rejected by VC at the very late-stages of the screening process. These firms narrowly lost the contest and are hence very similar, before VC financing, to the VC backed firms; self-selection is specifically taken into account. In line with previous results, Italian startups financed by VC reach a larger size and become more innovative than other startups. On the contrary, sales growth is similar and profitability is worse than firms in the control group. VC-backed companies experience larger rise in labor costs, while the commercialization of their innovative projects takes longer: this explains their worse profitability and the deterioration in their credit score. Both effects tend to disappear after four years from VC financing, when sales increase for VC-backed firms at the same pace as for the control group. Unlike other studies, no differences are detected for the survivorship rates of VC-backed firms in Italy. We also provide new evidence on the impact of VC on firms’ financial structures: VC-backed firms show a much larger increase in equity; this rise is however only half the increase in total assets that is hence not only explained by the injection of VC equity. Another result in this direction is that the effects on firms’ size and innovation hold when we restrict the control group to firms that also increase their equity from investors different from VC; this suggests that VC effects on size and innovation might also be linked to their managerial expertise and network connections. Finally, in line with previous evidence, the effects found in the paper are exclusively driven by independent VC investors compared with captive VC.