Corporate greed: its effect on customer satisfaction,corporate social responsibility and corporate reputation among bank customers

Corporate greed has received increasing attention in recent years with various stories hitting the headlines, particularly after the global financial crisis and the ensuing negative attitudes toward banks. Customer satisfaction and corporate social responsibility are known to have a positive effect on corporate reputation among customers, but perceived corporate greed is likely to impede their effect. Corporate greed, customer satisfaction, corporate social responsibility and corporate reputation are considered, and a research model is proposed. Results indicate that the effect of corporate greed is stronger on corporate social responsibility than on customer satisfaction, implying that corporate social responsibility activities may be futile if the company is perceived to be acting greedily by its customers. Thus, perceptions of corporate greed need to be dealt with swiftly, to enable management to enhance the corporate reputation of the firm.     

A survey of corporate perceptions of short-termism among analysts and fund managers

There is a popularly held view that institutional investors and stockbrokers' analysts take a short-term view when making or advising on investment decisions. Short-termism is held to be a particular problem for economies such as the US and the UK which rely heavily on stock exchanges to price securities and help reallocate resources through take-over. This is deemed to be detrimental to long-term corporate development and overall economic growth. The paper seeks to show the extent to which directors of large UK companies perceive that analysts and institutional investors evaluate their companies on short-term criteria. The role of institutional investors in the context of short-termism is important because they own a large proportion of equity. The paper then seeks to explain why some company directors appear to believe in short-termism while others do not. Hence the paper is not investigating whether ‘the City’ is short-termist but is examining the reasons why directors of large publicly quoted companies believe ‘the City’ is or is not short-termist about their company. The conclusion of this paper is that there is some evidence to support the view that ‘the City’ is perceived as being short-termist towards some companies but that the phenomenon is more narrowly focused and of lesser importance than its supporters claim.     

Institutions,ownership, and finance: the determinants of profit reinvestment among Chinese firms

Johnson et al. (2002. American Economic Review 92 (5), 1335–1356) examine the relative importance of property rights and external finance in several Eastern European countries. They find property rights to be overwhelmingly important, while external finance explains little of firm reinvestment. McMillan and Woodruff (2002. Journal of Economic Perspectives 16 (3), 153–170) further conjecture that as transition moves along, market-supporting (financial) institutions should become more important. This paper reexamines those issues in the context of China in 2002, when the transition had moved far. We also find that secure property rights are a significant predictor of firm reinvestment. However, in line with McMillan and Woodruff, we find that access to external finance in the form of bank loans is also associated with more reinvestment. Following Acemoglu and Johnson (2003. Unbundling institutions. Unpublished working paper 9934, National Bureau of Economic Research, Cambridge, MA), we separate our proxies for the security of property rights into two groups: those measuring the risk of expropriation by the government and those measuring the ease and reliability of contract enforcement. Whereas those authors’ cross-country results suggest that risk of expropriation is the more severe impediment to economic development, ours indicate that both expropriation risk and contract enforcement play a role in Chinese firms’ reinvestment decisions. We also find that another aspect of property rights, the extent of private ownership, is associated with greater reinvestment. At China's current stage of development, expropriation risk, contract enforcement, access to finance, and ownership structure all appear to matter for reinvestment decisions. Some evidence also exists that access to finance and government expropriation affect small firms more than large ones.     

The rise of corporate governance in corporate control research

This article has two related tasks. First, we review the articles published in this Special Issue on Corporate Control, Mergers, and Acquisitions. These articles provide new evidence on several aspects of corporate control and governance including the value and performance effects of various ownership groups, the impact of internal governance structures, the effects of regulatory changes on specific industries and evidence on bidding strategies in takeovers. This analysis leads us to our second task – to examine the evolution of corporate control research, broadly defined. Our analysis shows a movement in research from mergers and acquisitions to a broader analysis of corporate governance, especially internal governance features. We suggest that there is a trend toward an increase in the relative importance of internal governance compared to discipline from the market from corporate control. This trend reflects an important change over the past several decades in the means through which the market disciplines corporate behavior.     

在PowerBuilder数据窗口间数据传递的探讨

随着数据库技术在各行各业的广泛应用,作为企业级数据库前端开发工具的PowerBuilder日益成为开发人员的得力助手.PowerBuilder以其开放的体系结构,友好的用户界面和简洁高效的开发环境赢得了众多程序员的喜爱.其独到之处,就是数据窗口(DataWindow).它能够灵活地组织数据库中的各种数据,如果能够熟练地运用数据窗口这一专利技术,无疑会给开发人员和用户带来巨大的方便.     

The persistence of bank profit

This paper examines the intensity of competition in 65 national banking industries. Country-level dynamic panel estimates of the persistence of bank profit are reported and compared. Persistence of bank profit is interpreted as an indicator of the intensity of competition, and as such is found to be consistent with traditional structure-based and conduct-based competition indicators. Persistence is negatively related to the rate of growth in GDP per capita, and positively related to the size of entry barriers. Persistence tends to be weaker, and competition stronger, in countries where institutional development is more advanced and external governance mechanisms are strong.     

Corporate goodness and profit warnings

Is a firm that is known for positively engaging stakeholders expected to voluntarily disclose bad financial news? If it makes the announcement, does its corporate goodness help to mitigate the stock price reaction? We examine these issues using a sample of profit warnings, and a sample of firms with negative earnings surprises that did not warn. Firms that have positive corporate social responsibility ratings are more likely to provide earnings warnings than other firms. When they do provide a profit warning, the event negative abnormal returns are of significantly smaller magnitude than the returns of other firms providing warnings. This effect does not occur for social firms that decide not to warn. They suffer the same negative stock price impact on the earnings announcement day as other firms.     

化金融风险为收益

对于市场化与国际化程度日益提高的中国企业来说,如何有效地管理金融风险,避开金融的“暗礁”,显得尤为迫切。而在这个过程中,CFO要对作为合作伙伴的银行高度关注。     

Managing price, gaining profit

The fastest and most effective way for a company to realize maximum profit is to get its pricing right. The right price can boost profit faster than increasing volume will; the wrong price can shrink it just as quickly. Yet many otherwise tough-minded managers miss out on significant profits because they shy away from pricing decisions for fear that they will alienate their customers. Worse, if management isn't controlling its pricing policies, there's a good chance that the company's clients are manipulating them to their own advantage. McKinsey & Company's Michael Marn and Robert Rosiello show managers how to gain control of the pricing puzzle and capture untapped profit potential by using two basic concepts: the pocket price waterfall and the pocket price band. The pocket price waterfall reveals how price erodes between a company's invoice figure and the actual amount paid by the customer--the transaction price. It tracks the volume purchase discounts, early payment bonuses, and frequent customer incentives that squeeze a company's profits. The pocket price band plots the range of pocket prices over which any given unit volume of a single product sells. Wide price bands are commonplace: some manufacturers' transaction prices for a given product range 60%; one fastener supplier's price band ranged up to 500%. Managers who study their pocket price waterfalls and bands can identify unnecessary discounting at the transaction level, low-performance accounts, and misplaced marketing efforts. The problems, once identified, are typically easy and inexpensive to remedy.     

Creating corporate advantage

What differentiates truly great corporate strategies from the merely adequate? How can executives at the corporate level create tangible advantage for their businesses that makes the whole more than the sum of the parts? This article presents a comprehensive framework for value creation in the multibusiness company. It addresses the most fundamental questions of corporate strategy: What businesses should a company be in? How should it coordinate activities across businesses? What role should the corporate office play? How should the corporation measure and control performance? Through detailed case studies of Tyco International, Sharp, the Newell Company, and Saatchi and Saatchi, the authors demonstrate that the answers to all those questions are driven largely by the nature of a company's special resources--its assets, skills, and capabilities. These range along a continuum from the highly specialized at one end to the very general at the other. A corporation's location on the continuum constrains the set of businesses it should compete in and limits its choices about the design of its organization. Applying the framework, the authors point out the common mistakes that result from misaligned corporate strategies. Companies mistakenly enter businesses based on similarities in products rather than the resources that contribute to competitive advantage in each business. Instead of tailoring organizational structures and systems to the needs of a particular strategy, they create plain-vanilla corporate offices and infrastructures. The company examples demonstrate that one size does not fit all. One can find great corporate strategies all along the continuum.     

Contractual corporate governance

Companies have the choice to deviate from their national corporate governance standards by opting into another system. They can do so via contractual devices – such as cross-border mergers and acquisitions, (re)incorporations, and cross-listings – which enable them to choose their preferred level of investor protection and regulation. This paper reviews these three main contractual governance devices, their effect on value, and whether their adoption by firms induces a race to the bottom or a race to the top. Indeed, firms may opt for less shareholder-orientation or investor protection (shareholder-expropriation hypothesis) rather than for more stringent rules that require firms to focus on shareholder value (bonding hypothesis).     

Behavioral consistency in corporate finance: CEO personal and corporate leverage

We find that firms behave consistently with how their CEOs behave personally in the context of leverage choices. Analyzing data on CEOs' leverage in their most recent primary home purchases, we find a positive, economically relevant, robust relation between corporate and personal leverage in the cross-section and when examining CEO turnovers. The results are consistent with an endogenous matching of CEOs to firms based on preferences, as well as with CEOs imprinting their personal preferences on the firms they manage, particularly when governance is weaker. Besides enhancing our understanding of the determinants of corporate capital structures, the broader contribution of the paper is to show that CEOs' personal behavior can, in part, explain corporate financial behavior of the firms they manage.     

分回利润(股息)的税务处理

业在国内投资、联营取得的税后利润,如果存在地区间所得税适用税率的差异,在旧的《企业所得税纳税申报表》中,通过《纳税项目调整表》将其已并入利润部分调减应纳税所得额,单独计算其补税问题。按现行规定,投资方先将分回的投资收益还原为应纳税所得(或称税前利润)计入收入总额     

Trends in corporate diversification

This paper studies the diversification and refocusing strategies of firms in the last three decades. The 1980s were characterized by a trend towards greater focus. This trend slackens in the 1990s to be replaced by a surge in the number of newly listed single-segment firms. From 2000 to 2007 there is very little change in the proportion of diversified firms. Overall, the proportion of conglomerates declines from 40% to 17% from 1980 to 1997. In addition, about one third of the diversifying firms reverse the diversification decision within four years. The analysis of the statements made by these firms suggests that there is significant heterogeneity in the motivations behind diversification.     

Accounting and corporate accountability

The rationale for and techniques of social responsibility accounting are examined analytically. The fear that corporate managers might act contrary to the interests of shareholders and not be concerned with those with whom the corporation contracts (creditors, workers and consumers) is not supported. But others may be harmed by corporate actions (externalities). The ways in which social responsibility accounting can be used to measure and serve as a means of controlling externalities are delineated, analyzed and rejected.     

The impact of corporate governance on corporate performance: Evidence from Japan

Employing a unique data set provided by Governance Metrics International, which rates firms using six different corporate governance dimensions, we analyze whether Japanese firms with many governance provisions have a better corporate performance than firms with few governance provisions. Employing an overall index, we find that well-governed firms significantly outperform poorly governed firms by up to 15% a year. Using indices for various governance categories, we find that not all categories affect corporate performance. Governance provisions that deal with financial disclosure, shareholder rights, and remuneration do affect stock price performance. The impact of provisions that deal with board accountability, market for control, and corporate behavior is limited.     

Alliances and corporate governance

We study the link between a firm's quality of governance and its alliance activity. We consider alliances as a commitment technology that helps a company’ Chief Executive Officer overcome agency problems that relate to the inability to ex ante motivate division managers. We show that well-governed firms are more likely to avail themselves of this technology to anticipate ex post commitment problems and resolve them. The role of governance is particularly important when the commitment problems are more acute, such as for significantly risky/long-horizon projects (“longshots”) or firms more prone to inefficient internal redistribution of resources (conglomerates), as well as in the absence of alternative disciplining devices (e.g., low product market competition). Governance also mitigates agency issues between alliance partners; dominant alliance partners agree to a more equal split of power with junior partners that are better governed. An “experiment” that induces cross-sectional variation in the cost of the alliance commitment technology provides evidence of a causal link between governance and alliances.     

Operating performance changes associated with corporate mergers and the role of corporate governance

We find that corporate governance characteristics of acquiring firms (board ownership, board size, and block-holder control) have an economically and statistically significant impact on operating performance changes following mergers. We also show that dispersion of intra-board ownership stakes is an important but heretofore overlooked factor when judging the influence of ownership on the outcomes of corporate choices. Finally, we present evidence that suggests the market sometimes under- or overreacts to merger news when initially revaluing merger partners but corrects any miscalculation following the consummation of the merger.     

Learning to profit with discrete investment rules

The learning of optimal discrete investment rules is analysed and related to the problem of forecasting financial returns. The aim is twofold: to characterize some 'good' learning methods for agents using investment rules of this form and to explain why many observed investment rules such as technical trading rules are discrete. A consistent estimator for discrete investment rules is used and it is shown, using simulations, that direct estimation of investment rules is preferable to the estimation of forecasting models to be used in such rules. This model and the associated results indicate there are a number of reasons why it may be easier to learn a good discrete investment rule than to learn a continuous rule; this provides a partial explanation of why discrete investment rules are used so widely.