The Role of Pension Business Benefits in Institutional Block Ownership and Corporate Governance*

We investigate whether potential pension contracting benefits lead institutions that provide pension services to acquire ownership blocks in firms and the implications of such blockholdings on the firms' corporate governance. We use the 2006 Pension Protection Act, which expanded pension participation in certain states, as a quasi-exogenous shock and find an increase in block ownership by pension-providing institutions in firms with substantial operations in affected states. Further, we find that the acquisition of a large block increases the likelihood that the institution will provide future pension services to the firm. With regard to corporate governance, we find that the acquisition of large pension blockholdings is associated with higher CEO pay and lower CEO turnover following poor financial performance. However, contrary to the prediction of the private benefits hypothesis, we do not find consistent evidence that large pension blockholdings are associated with declining firm profitability, suggesting that pension institutions are incentivized to exert monitoring to preserve the investment value of their blockholdings. Overall, our evidence is consistent with pension service institutions acquiring ownership blocks to obtain pension contracts, but our evidence does not support the prediction that they use their influence to compromise shareholder value.     

家族上市公司与机构投资者持股内因:权限抑或公司价值

基于机构投资者持股对家族上市公司价值影响的实证分析表明,机构投资者持股提高了家族企业价值,机构投资者持股比例和公司价值正相关。在控制性家族股东现金流权增大的情况下,机构投资者持股可以提高公司价值,而在控制性家族控制权增大的情况下,机构投资者持股对公司价值的提升作用会减弱。控制权与现金流权偏离程度越大时,机构投资者持股对公司价值的提升幅度也会降低,但不显著。     

Corporate Investment Incentives and Accounting‐Based Debt Covenants*

This paper studies the conditions under which accounting‐based debt covenants increase firm value in a setting that incorporates the conflicting incentives of shareholders, bondholders, and managers. We construct a model in which debt is needed to discipline managerial investment decisions despite endogenous compensation contracts. We show that accounting covenants increase value when (1) debt serves as a credible commitment to penalize poor investment decisions; (2) the firm faces other (exogenous) sources of uncertainty that can make debt risky despite good investment decisions; and (3) accounting information serves as a contractible proxy for firm's economic performance. In these circumstances, accounting covenants ensure that shareholders do not offer compensation schemes that would encourage bondholder wealth expropriation when the debt becomes risky. A covenant specifying a required level of accounting performance provides additional bondholder power when performance is low. An accounting‐based dividend covenant allows a disbursement to maintain investment incentives when performance is high without allowing dividend‐based expropriation. The optimal covenants depend on the reliability of accounting information, and the interaction between accounting performance and the different incentive conflicts provides new insight into the empirical literature on accounting‐based covenants.     

How to Share Our Risks Efficiently? Principles for Optimal Social Insurance and Pension Provision

The efficient organisation of social insurance is an important problem for modern societies. The paper discusses evidence that shocks in labour income have largely persistent effects and analyses the implications of this observation for the optimal design of institutions for wage contracting, social security, and pensions. In an optimal contract, wages reflect variations in individual productivity for incentives reasons. However, the optimal contract insures workers against firm specific shocks. These can better be born by shareholders who can diversify risks on capital markets. Progressive income taxation provides further insurance. On top of that there is scope for additional insurance based on ‘verifiable’ information on unemployment and health conditions. As final form of ‘insurance’, the paper analyzes the role of self-insurance. Income shocks can be absorbed partially by precautionary saving. The individual’s saving plans for retirement and for precaution are, therefore, related issues. In an institutional setting with mandatory saving for retirement, an integration of disability and unemployment insurance on the one hand and the pension system on the other hand in a lifetime savings account allows for this interrelation. The paper analyzes how to deal with the uncertainty in the return on savings in the framework of a lifetime saving account.     

Conditional Conservatism and Debt versus Equity Financing

Extant research suggests that conditional conservatism reduces information asymmetry between a firm and its shareholders as well as its debtholders. However, there is little evidence on whether conditional conservatism reduces information asymmetry differentially for shareholders and debtholders. We use the setting of a firm's choice between equity versus debt when it seeks a significant amount of external financing to examine this research question. We find that when firms raise a significant amount of external financing, the use of equity (versus debt) increases with the level of conservatism. We also find that the reduction in cost of equity associated with conservatism is greater for equity issuers than for debt issuers, but find no such difference when we examine cost of debt. In addition, we find that the positive effect of conservatism on the choice of equity issuance (versus debt issuance) is accentuated when the information asymmetry between the firm and its shareholders is more severe. Overall, our results suggest that conservatism reduces information asymmetry more between firms and shareholders than between firms and debtholders.     

Do Shareholders Fight for Firm Value or Market Value in Emerging Markets? The Mediating Effect of Board Structure Dynamics on Dividend Policy Decision

The paper examines the mediating effect of board structure dynamics on the relationship between dividend payout and shareholders’ wealth at the firm level and market level. Panel regression models are used by applying data from 27 listed firms in Ghana between 2010 and 2017. We find that board structure dynamics have a direct effect on shareholders’ wealth at both levels. However, the results reveal new evidence that board structure dynamics play a mediating role on the relationship between dividend policy decision and shareholders’ wealth only at the market level. We find that independent directors and CEO duality significantly reduce market value of shareholders through dividend payout decision. However, independent directors and longer CEO tenure in office mediate a positive effect on the relationship between dividend policy and shareholders’ wealth at the market level. Thus, the mediating effect of board structure dynamics, particularly independent directors and CEO tenure, are important in predicting a positive relationship between dividend policy and shareholders’ wealth at the market level than at the firm level. Therefore, regulatory bodies and investors should provide strong board structure dynamics that serve as a mediating mechanism for prudent dividend policy decisions that add value to shareholders’ wealth.     

Corporate Social Responsibility,Firm Value and Corporate Governance Code Revisions: The Asian Evidence*

The present study examines the relationship between corporate social responsibility (CSR) and firm value, and the effects of corporate governance code revisions on the relationship. We examine this relationship for: (i) a high‐income country, Japan; (ii) middle‐income countries China, Malaysia and Thailand; and (iii) low‐income countries India and Indonesia. We use the Heckman two‐stage sample selection bias approach for the empirical analysis. We find that Japanese stakeholder CSR and environmental CSR have a smaller positive effect on firm value compared to the middle‐income countries, but we do not find any statistically significant association for the low‐income countries. In addition, we find that only Japanese corporate governance code revisions significantly contribute to the positive relationship between CSR and firm value, which concurs with the new recommendations documented in the revised codes of corporate governance. The present study reveals that foreign major shareholders matter to the value creation of CSR in Japan and the middle‐income countries of China, Malaysia and Thailand.     

Bankers on the Board,Market Competition,and Conflicts of Interest

Abstract

Bankers on the board are expected to act as a fund-raiser and to help lowering financial costs, but they can impose conflicts of interest between shareholders and creditors. We empirically analyse the impact of banker-directors on corporate leverage and investment, using Korean firm data during the period from 2000 to 2012. Bankers on the board turn out to play different roles depending on market competition and macroeconomic circumstance. In less competitive industries where banks are less concerned about financial distress as a creditor, the presence of bankers on the board has higher leverage and more active investment, which can align with the interest of shareholders. However, in more competitive environment where firms are more concerned about financial distress and external financing, bankers on the board do not always increase leverage and investment, which can be divergent from the interest of shareholders.     

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.     

商业模式与企业绩效:控制机制的调节作用

基于组织匹配的观点,文章指出商业模式和控制机制之间存在匹配关系,因为商业模式由企业成员运营,其能否有效运作取决于这些成员的行为。因此,企业需要设计恰当的控制机制来保证商业模式有效运作。文章通过分析控制机制对商业模式与企业绩效关系的影响来发现商业模式和控制机制的匹配关系。研究发现：结果控制正向调节新颖型商业模式与企业绩效的关系,负向调节效率型商业模式与企业绩效的关系;过程控制负向调节新颖型商业模式与企业绩效的关系,正向调节效率型商业模式与企业绩效的关系。文章从控制机制视角回答了如何保证商业模式有效运作的问题,对理解商业模式价值有促进作用,并丰富了对控制机制设计的认识。同时,文章可以指导企业针对其商业模式设计控制机制,通过实现两者的匹配来保证商业模式有效运作进而提高企业绩效。     

Contract Farming in Mozambique: Implications for Gender Inequalities Within and Across Rural Households

This paper analyses the implications of contract farming for gender inequalities in rural Mozambique. Contract farming is often considered one of the major tools of agribusiness development. It broadly includes those arrangements under which producers commit to providing cash crop to a buyer firm. This paper exploits a panel dataset (2002–2005) collected by the Mozambican Ministry of Agriculture among a nationally representative sample of rural households to explore contracts’ implications for gender equality both across and within households. We look at both the participation of female‐headed households in contracts and the impact of establishing a contract on a set of intra‐household women empowerment indicators. Concerning the first, our results confirm a (small though significant) effect of selection out of contracts of households where a woman is the household’s head. With regard to the second, we expect contrasting effects to be at work: on the one hand, increased income may relax budget constraints improving women’s living conditions, and on the other, we may expect a shift in favour of men of the control over the household’s assets. We find different results according to the indicator used; after controlling for selection bias, we find no effect on control over land but a negative effect on women’s access to extension services.     

Tax Loss Carryovers in a Competitive Environment*

The fact that incumbent firms can immediately deduct research and development (R&D) investments from taxable income is generally believed to give them a strategic advantage over new firms that cannot deduct the investment cost, but instead generate a net operating tax loss carryover. Using an analytical model, we show that this conventional wisdom need not hold in a competitive environment. We examine operating and investment decisions in a duopolistic industry in which an initial investment in R&D yields an immediate tax benefit for one firm, but creates a net operating loss carryover for the other firm. If both firms invest in R&D, the firm with the net operating loss carryover makes more aggressive capital investment decisions following successful R&D. This may deter the incumbent firm from investing in R&D despite the lower aftertax costs of this investment. Changing the tax loss carryover rules would thus not only affects start‐up or loss firms, but would also affect the investment decisions of profitable firms in the same industry.     

权力配置、管理者行为与企业价值

现代财务理论以企业价值最大化为理财目标,如何对管理者实行有效的激励是财务理论研究中一个十分重要的问题。本文通过构建一个关于信息搜集的非合作博弈模型分析了不同的权力配置结构对委托人和代理人的行为所产生的影响,从而从理论上说明了权力如何在股东和管理者之间进行分配将决定企业的价值。     

公共选择视角下我国土地使用权的公平交易立法模式创建

我国现行土地使用权交易立法制度存在浓厚的身份化歧视。国家一方面严格限制集体土地使用权流转，另一方面又以行政强制征收和垄断市场的方式，实现土地收益权能的最大化。这种身份化的歧视性立法制度安排，导致农民土地收益权能的大部丧失和严重的分配不公。公共选择视角的实证方法论提供了分析问题的崭新视角。统筹城乡发展，实现从身份到契约转变，创建公平的土地使用权交易立法模式是次优的法治选择。     

纵向兼任高管能降低股价崩盘风险吗?

纵向兼任高管究竟会加强大股东对管理层的监督,减少管理层机会主义行为,提升公司治理水平;还是会强化大股东对上市公司的控制,提升其私有权收益的获取能力,增加企业风险？为此,文章将以2007年-2017年中国A股上市公司为研究样本,探究纵向兼任高管如何影响企业的股价崩盘风险。研究发现,纵向兼任高管显著降低了公司未来股价崩盘风险;在进行Heckman两阶段模型、倾向得分匹配等稳健性检验后,这一结论依然成立。同时,文章进一步研究发现,纵向兼任高管在"监督效应"和"更少掏空效应"共同作用下降低了股价崩盘风险;且当纵向兼任高管权力越大时,即纵向兼任董事长时,对公司未来股价崩盘风险的降低作用越明显。文章不但深化了股价崩盘风险影响因素的研究,而且有助于我们全面认识纵向兼任高管这一关系在公司治理中的作用,这对于完善公司治理、防范股价崩盘风险,进而促进我国资本市场的健康发展有重要的意义。     

资源还是负担？国有资本参股对跨境并购的影响分析

跨境并购是中国企业获取海外市场与战略性资产的重要方式,已有研究表明国有资本直接参与跨境并购过程中遭遇了不少阻碍,但少有学者关注国有资本发挥的资源作用。文章则探讨了非国有制企业引入国有股东在跨境并购中获得的资源优势。以2009-2018年中国非国有上市公司跨境并购交易作为样本,研究发现：非国有制企业中国有资本持股的比例更高会带来更多的资源,有助于跨境并购的完成。而当被并购目标是上市企业、属于高科技行业以及位于制度完善度较好的东道国时,东道国合法性门槛提高,导致国有资本参股的非国有制企业仍然会遭遇到来自东道国的歧视与制度压力,削弱国有资本的资源优势。在进一步分析中验证了主效应的机制,发现国有资本能够帮助解决非国有制企业的融资困难问题,进而促进跨境并购的完成。除此之外,文章也利用工具变量法解决了潜在的内生性问题。     

The evolution of the productivity dispersion of firms: a reevaluation of its determinants in the case of Japan

This paper contributes to the literature that empirically analyzes the evolution of productivity dispersion at the firm level and its determinants. We investigate the case of Japanese firms by using a firm-level panel dataset taken from a large-scale administrative survey for the years 1994–2003. We confirm that there was indeed an overall increase in productivity dispersion. Moreover, we find that the introduction of information and communication technologies (ICT) decreased the within-industry labor productivity dispersion, contrary to what has been found for some other countries. On the other hand, we find evidence of a significant and positive impact of internationalization on productivity dispersion.     

Is Audit Committee Equity Compensation Related to Audit Fees?*

Section 301 of the Sarbanes‐Oxley Act (SOX) implicitly assumes that audit committees can independently determine audit fees. Critics of section 301 have questioned this assumption in particular, and the efficacy of section 301 more generally. In response, the SEC issued a concept release in 2015 calling for public disclosure of the process that audit committees follow for determining auditor compensation. Motivated by these calls and the widespread use of stocks and options to compensate firms' independent directors, we examine the relation between equity compensation granted to audit committee members and audit fees. Using a sample of 3,685 firm‐year observations during 2007–2015, we find a negative relation between audit committee equity compensation and audit fees, consistent with larger equity pay inducing audit committee members to compromise independence by paying lower audit fees. These findings are robust to controlling for endogeneity, firm size, alternative measures of equity compensation, alternative samples, and an alternative treatment of extreme values. We further show that larger equity compensation is associated with lower earnings quality. We also find that the negative effect of equity compensation on audit fees is stronger when city‐level audit market competition is high. However, this negative relation disappears when (i) firms face high litigation risk, (ii) auditors have stronger bargaining power, (iii) the audit committee includes a high proportion of accounting experts, and (iv) auditors are industry experts. Our results are relevant for regulators and investors.     

商业信用、高管薪酬与公司价值

利用A股上市公司2001—2010年的数据研究发现,商业信用能提高高管薪酬,但是不能提高公司价值。商业信用和高管薪酬在对公司价值起负作用时存在替代关系,这种替代关系在不同产权性质的企业并无明显差异。研究表明:当高管薪酬主要还是以业绩为基础,高管就有足够的动机利用商业信用制造"不真实的增长",从而达到获得高额报酬的目的,但是高管这一行为损害了股东的利益;商业信用和高管薪酬在降低公司价值的作用中存在替代关系,上市公司要在商业信用制度性安排和高管薪酬激励机制之间权衡。     

CEO compensation and firm performance in Japan: Evidence from new panel data on individual CEO pay

Prior studies on Japanese executive compensation have been constrained by the lack of longitudinal data on individual CEO pay. Using unique 10-year panel data on individual CEO's salary and bonus of Japanese firms from 1986 to 1995, we present the first estimates on pay-performance relations for Japanese CEO compensation. Specifically we find consistently that Japanese CEO's cash compensation is sensitive to firm performance (especially accounting measures), and that the “semi-elasticity” of CEO's cash compensation with respect to ROA is 1.3 to 1.4, which is in general agreement with prior estimates elsewhere. As such, our estimates do not support that Japanese corporate governance is unusually defunct with regard to the significance and size of the sensitivity of CEO compensation to accounting profitability. On the other hand, to be consistent with the literature on Japanese corporate governance that tends to downplay the role of shareholders and stress the role of banks and employees, we find that stock market performance tends to play a less important role in the determination of Japanese CEO compensation. Finally, we find that the bonus system makes CEO compensation more responsive to firm performance in Japan. The finding is in contrast to the literature on compensation for regular employees in Japan which often argues that bonus is a disguised base wage. J. Japanese Int. Economies 20 (1) (2006) 1–19.