Corporate governance and tunneling: Empirical evidence from China

We analyze asset appropriation by principal shareholders in China and uncover the following relationships: (1) outsiders in the board of directors, audit without non-clean opinion, and dispersed ownership prevent operational tunneling; (2) belonging to a business group and issuing B or H share exacerbate asset appropriation. Institutional ownership does not prevent the embezzlement of assets and is endogenous, as investors select companies with good governance. Besides governance mechanisms, stock characteristics matter in that larger firms exhibit less tunneling, whereas highly leveraged firms experience the opposite. We find a decline of tunneling in 2001, which might be due to economic reforms.     

Corporate ownership,corporate governance reform and timeliness of earnings: Malaysian evidence

This paper provides the first evidence showing that ownership concentration and the identity of the largest shareholder matter to the timeliness of corporate earnings, measured by a stock price-based timeliness metric and the reporting lag. Using panel data of 1276 Malaysian firms from 1996 to 2009, we find a non-linear relationship between concentrated ownership, measured by the largest shareholding in a firm, and the reporting lag but not the timeliness of price discovery. Although firms with government as the largest shareholder and political connections have a significantly shorter reporting lag, only the former are timelier in price discovery. Firms with family and foreigners as the largest shareholder however are less timely in price discovery. While the reporting lag is shorter in the period after the integration of the Malaysian Code of Corporate Governance (MCCG) into Bursa listing rules, its impact on the timeliness of price discovery is mostly immaterial.     

Corporate governance,earnings management,and IFRS: Empirical evidence from Chinese domestically listed companies

This research used 1,329 Chinese publicly listed companies’ data from 1998 to 2009 to investigate how IFRS, state ownership, and board of directors (BOD) influence earnings management. We conclude that state-ownership to an extent discourages earnings management in the current environment of China. However, IFRS implementation does not seem to deter earnings management. When state-ownership is not the case, increasing the number of independent BOD seems to be a good practice to discourage earnings management, although non-independent BOD does not make any difference.     

Government ownership,corporate governance and tax aggressiveness: evidence from China

This study investigates how government ownership and corporate governance influence a firm's tax aggressiveness. Using Chinese listed companies during 2003–2009, we find that compared with government‐controlled firms, non‐government‐controlled firms pursue a more aggressive tax strategy. In particular, non‐government‐controlled firms with a higher percentage of the board shareholdings and with a CEO who also serves as the board chairman are more aggressive. For government‐controlled firms, we find that board shareholding has an impact on tax aggressiveness and it does not differ between local and central government‐controlled firms. However, local government‐controlled firms in less developed regions where the implementation of corporate governance measures is generally less effective are more tax aggressive than those in other regions.     

Corporate governance and dynamics capital structure: evidence from Vietnam

This paper examines the relationship between corporate governance and speed of adjustment (SOA) of capital structure for listed firms in Vietnam from 2000 to 2016. We first examine the literature on the influence of crucial corporate governance mechanisms, including gender diversity and managerial ownership, on SOA. Empirically, we then find that board size, board independence, gender diversity, and managerial ownership significantly increase SOA, but CEO duality significantly decreases it. We discuss some policy implications for firms and Vietnamese authorities.     

Corporate social performance,ownership structure,and corporate governance in France

Empirical evidence of the influence of shareholders and governance practices on corporate social responsibility (CSR) policies is mixed, and most studies have been conducted in the United States. This study of the French market and its unique characteristics reveals the forms of shareholding and CSR implementations, thereby shedding new light on the influence of shareholders on corporate social performance (CSP). Specifically, with a sample of French listed companies, the authors investigate how ownership concentration, ownership type, and governance practices relate to CSP. The geography of capital is relevant, but little evidence arises of the importance of shareholders’ identity. That is, neither family nor institutional shareholders influence CSP, and large shareholders seem to place less emphasis on CSR, suggesting that they are reluctant to invest in it. Finally, the results related to good governance practices are mixed, but board independence provides a foundation for good CSR.     

Corporate governance and recent consolidation in the banking industry

Using the universe of publicly traded banks at year-end 1993, we find that target banks' outside directors, but not inside directors, tend to own more stock than their counterparts in other banks. Having an outside blockholder is also associated with banks becoming targets. In contrast to existing research on industrial firms, board structure does not help determine which sample banks sell. Neither the fraction of outsiders on a bank's board nor having an outside-dominated board differentiate the target banks in our sample. Instead, outside directors/shareholders and blockholders appear to be primarily responsible for encouraging bank managers to accept an attractive merger offer     

Corporate governance and firm value: International evidence

In this paper, we investigate the relation between firm-level corporate governance and firm value based on a large and previously unused dataset from Governance Metrics International (GMI) comprising 6663 firm-year observations from 22 developed countries over the period from 2003 to 2007. Based on a set of 64 individual governance attributes we construct two alternative additive corporate governance indices with equal weights attributed to the governance attributes and one index derived from a principal component analysis. For all three indices we find a strong and positive relation between firm-level corporate governance and firm valuation. In addition, we investigate the value relevance of governance attributes that document the companies' social behavior. Regardless of whether these attributes are considered individually or aggregated into indices, and even when “standard” corporate governance attributes are controlled for, they exhibit a positive and significant effect on firm value. Our findings are robust to alternative calculation procedures for the corporate governance indices and to alternative estimation techniques.     

Corporate diversification,ownership structure,and firm value: The Singapore evidence

We provide international evidence on the level and value of corporate diversification using a sample of 145 Singapore firms. We find that the level of diversification is positively related to firm size and negatively related to the equity ownership of outside blockholders. However, we find no evidence that insider ownership has a significant impact on the level of diversification. We find significant value loss from diversification only for those firms with low managerial ownership, suggesting that value-reducing diversification stems from agency problems. Outside block ownership does not have a significant impact on the value of diversification. Thus, while outside blockholders may act as a deterrent on the level of diversification, there is no evidence that they can effectively reduce the agency problems for those firms with low managerial ownership.     

State ownership and firm performance: Empirical evidence from Chinese listed companies

While the relationship between state ownership and firm performance has been widely researched, the empirical evidence has provided mixed results. This study applies panel data regression techniques to 10,639 firm-year observations of non-financial Chinese listed firms during 2003–2010 to examine the relationship between state ownership and firm performance. The results show that state ownership has a U-shaped relationship with firm performance. The Split Share Structure Reform in 2005–2006 played a positive role in enhancing the relationship between state ownership and firm profitability ratios. Although state ownership decreased significantly after 2006, it remains high in strategically important industry sectors such as the oil, natural gas and mining sector and the publishing, broadcasting and media sector. The findings reveal that a higher level of state ownership is superior to a dispersed ownership structure due to the benefits of government support and political connections. The Split Share Structure Reform made previously non-tradable shares legally tradable, improving corporate governance and reducing the negative effect of non-tradable state shares.     

Bank ownership structures and sustainable banking initiatives: The moderating effect of governance mechanism

Bank regulators in the Sub-Saharan Africa (SSA) region are increasingly focusing on effective bank ownership structures (BOS) as a key corporate governance (CG) mechanism to drive sustainable banking disclosures (SBD). However, it is unclear whether BOS can lead to an enhancement in SBD. Understanding these key associations can help policymakers and banks design sustainable strategies to promote SBD. In this study, we fill this gap by investigating the impact of BOS on SBD and determining the extent to which broad CG disclosure moderates this relationship. We conduct a dynamic two-step system generalized method of moments model over an extensive dataset. We demonstrate that the relationship between BOS and SBD is contingent on the quality of the CG mechanisms. Bank ownership by institutions and foreign investors (government) positively (negatively) impacts SBD. Also, there is a negative but insignificant relationship between director ownership and SBD. Finally, the relationship between BOS and SBD is positively moderated by the extent of CG disclosure. This moderating effect improves for banks with quality CG mechanisms. We identify CG disclosure as the possible channel through which BOS and SBD are interlinked. Our findings call for banks to adopt and implement good governance disclosures to improve SBD.     

Family ownership and firm performance: Empirical evidence from Western European corporations

This paper empirically examines how family-controlled firms perform in relation to firms with nonfamily controlling shareholders in Western Europe. The sample consists of 1672 non-financial firms. Active family control is associated with higher profitability compared to nonfamily firms, whereas passive family control does not affect profitability. Active family control continues to outperform nonfamily control in terms of profitability in different legal regimes. Active and passive family control is associated with higher firm valuations, but the premium is mainly due to economies with high shareholder protection. The benefits from family control occur in nonmajority held firms. These results suggest that family control lowers the agency problem between owners and managers, but gives rise to conflicts between the family and minority shareholders when shareholder protection is low and control is high.     

公司治理、财务状况与信息披露质量——来自深交所的经验证据

本文从公司治理、经营状况角度分析、讨论了它们与信息披露质量间的内在关系。本文以深圳证券交易所2001-2004年信息披露质量评级报告结果及1884家上市公司的面板数据及4年的分年度数据为研究样本进行分析,实证结果表明,上市公司信息披露质量:(1)与独立董事在董事会中所占的比例、财务收益能力、资产规模等因素正相关;(2)与资产负债率负相关;(3)与股权结构没有明显的相关性;(4)董事长与总经理合一型公司,其信息披露质量较低。     

Corporate governance, insider ownership and operating performance of Australian initial public offerings

We examine ownership structures and corporate governance attributes of 313 Australian initial public offerings (IPOs) between 1976 and 1993 and their relation with up to 5 years of post‐listing operating performance, adjusted for similar (non‐IPO) firms. Consistent with prior share price‐based evidence, we find that the operating performance of Australian IPOs typically deteriorates over the first 4 post‐listing years. Any evidence of a positive association between insider ownership and firm performance is confined to the fourth and fifth years after the IPO. Evidence of a positive relation between institutional ownership and performance is restricted to the latter part of our 5‐year post‐listing window. Board composition (i.e. outsider versus insider control) is not associated with operating performance, although there is some evidence that independent board leadership is associated with better operating performance.     

Corporate governance in banking: The role of the board of directors

We use a sample of large international commercial banks to test hypotheses on the dual role of boards of directors. We use a suitable econometric model (two step system estimator) to solve the well-known endogeneity problem in corporate governance literature, and demonstrate the empirical and theoretical superiority of system estimator over OLS and within estimators. We find an inverted U-shaped relation between bank performance and board size, and between the proportion of non-executive directors and performance. Our results show that bank board composition and size are related to directors’ ability to monitor and advise management, and that larger and not excessively independent boards might prove more efficient in monitoring and advising functions, and create more value. All of these relations hold after we control for the measure of performance, the weight of the banking industry in each country, bank ownership, and regulatory and institutional differences.     

Corporate governance,SFAS 157 and cost of equity capital: evidence from US financial institutions

This study examines the association between fair value measurements and the cost of equity capital under different fair value valuation methods, and assesses the impact of corporate governance on this relationship for US financial firms. We find that firms’ cost of equity capital is negatively associated with more verifiable fair value assets and positively related to less verifiable fair value assets. Furthermore, the positive association between less verifiable fair value assets and the cost of equity capital is mitigated under better corporate governance. The differential impact between more and less verifiable assets becomes smaller for firms with stronger governance. Our findings contribute to the ongoing debate on fair value regulation by investigating the economic consequences of adopting Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157) and the importance of audit committee financial expertise on fair value reporting. We also provide evidence on the importance of board independence, internal control strength, auditor industry specialists, and audit committee financial experts in fair value reporting.     

Securitization and systematic risk in European banking: Empirical evidence

Using a unique dataset of 592 cash and synthetic securitizations issued by 54 banks from the EU-15 plus Switzerland over the period from 1997 to 2007 this paper provides empirical evidence that credit risk securitization has a positive impact on the increase of European banks’ systematic risk. Baseline results hold when comparing estimated beta coefficients with a control group of similar non-securitizing banks. Building several sub-samples we additionally find that (a) the increase in systematic risk is more relevant for larger banks that repeatedly engage in securitization, (b) securitization is more important for small and medium financial institutions, (c) banks have a higher incentive to retain the larger part of credit risk as a quality signal at the beginning of the securitization business in Europe, and (d) the overall risk-shifting effect due to securitization is more distinct when the pre-event systematic risk is low.     

Discussion of ‘Government ownership,corporate governance and tax aggressiveness: evidence from China’

In this article, I discuss several aspects of the paper by Chan et al. (2013). After a brief introduction, the next three sections discuss the hypothesized links between government ownership, corporate governance, institutional factors and tax avoidance in Chan et al. (2013). The fifth section investigates some possible extensions on tax research in the setting of China, while the sixth section concludes this discussion.     

Financial fragility of banks,ownership structure and income diversification: Empirical evidence from the GCC region

This paper investigates the role that ownership structure and diversification of income plays in the financial stability of banks from the GCC region. We find evidence that suggests that higher concentration of ownership in any type of shareholding is associated with higher insolvency risk. However, this higher insolvency risk is not associated with any specific type of shareholders. Higher financial fragility is also associated with the size and whether the bank is an Islamic bank. Banks engaged in substantial fee-based activities are more financially stable as compared with banks that predominantly generate their incomes from traditional intermediation activities.