Institutional investors and corporate environmental and financial performance

We propose a conceptual framework to illustrate that when three conditions hold, institutional investors moderate a positive relation between corporate financial performance and corporate environmental performance. We explore heterogeneities across institution types to demonstrate the importance of each condition. The moderating effect works through the channels of expert consulting and effective monitoring. Our results have important policy and practical implications given the global trend of ownership concentration in institutional investors and the projection that by 2025, one out of three dollars under professional management will be invested in corporate social responsibility assets.     

Sustainability priorities,corporate strategy,and investor behavior

Using a sequential experiment, this study examines whether integration of material environmental, social, and governance (ESG) priorities into corporate strategy impacts investors’ short‐ and long‐term stock price assessments and investment allocation. In our examination, we consider the potential moderating effect of financial performance. We find that integration of ESG priorities into strategy does not have a significant effect on investors’ price assessments or investment allocation. This is true regardless of the trend in the company's financial performance. Our results hold across various demographics and the levels of investment knowledge and investment experience. Investors’ perception of relevance and reliability of material ESG information, however, has a mediating effect on their long‐term price assessment and investment allocation. Overall, our findings suggest that any future requirements on disclosure of ESG information by regulators and standard setters should aim to improve investors’ perception of the relevance and reliability of that information.     

The Distribution of Information among Institutional and Retail Investors in IPOs

This study examines investor performance in IPOs using a unique database comprising 85,384 investors and 29 offerings from Finland. The evidence indicates that on average institutional investors do not obtain larger initial returns than retail investors, as the incentive to acquire information is limited by allocation rules which favour small orders. This result is in contrast to findings by Aggarwal et al . (2002), who show that institutional investors perform better in a bookbuilding environment. Within each investor category, however, large orders are associated with the best performance, suggesting that information differences figure more importantly within rather than between categories.     

The Sensitivity of Individual and Institutional Investors' Expectations to Changing Market Conditions: Evidence from Closed-End Funds

This study investigates whether individual and institutional investors respond differently to changes in market conditions. Closed-end funds are the medium used to test the hypothesis because closed-end fund shares (held primarily by individual investors) and the underlying assets (held primarily by institutional investors) are claims to the same stream of distributions. The empirical results suggest that individual investors are more responsive than institutional investors to changes in market conditions. Moreover, although the response of institutional investors differs across stock and bond markets, we cannot reject the hypothesis that the additional sensitivity of individual investors' expectations is uniform across stock and bond markets.     

Multiple large shareholders and corporate environmental protection investment: Evidence from the Chinese listed companies

Agencies can reduce problems by adopting a governance structure of multiple large shareholders. However, multiple large shareholders may collude, thereby reducing the behavior that can create long-term value for the company. This paper uses a sample of companies listed on the Shenzhen and Shanghai stock exchanges between 2008 and 2017 to investigate the relationship between multiple large shareholders and corporate environmental protection investment (CEPI). We find that multiple large shareholders will significantly reduce CEPI. Specifically, external supervision and a company’s ownership structure affect the relationship between multiple large shareholders and CEPI. In addition, after participating in SOEs, non-state-owned shareholders will significantly improve CEPI of SOEs.     

投资法人制度的导入与投资者保护——以日本法为借鉴

证券投资基金根据组织形式的不同,可以分为公司型基金和契约型基金。目前,公司型基金在我国的立法和实践中尚未得到认可。但从整个国际趋势来看,公司型基金是一种不可或缺的主要基金组织形式,其在美国、英国、日本等国家都有了迅速而健全的发展。其中日本在1998年导入被称为证券投资法人的公司型投资基金制度,2000年又将其修改为投资法人制度,弥补了单一基金形式的不足,极大地促进了基金品种的创新,更全面地保护了投资者的利益。投资法人制度与其原有的契约型投资基金制度共同推动着日本投资基金业的发展。本文在考察分析日本投资法人制度的基础上,探讨该制度对当前我国《证券投资基金法》修改的借鉴意义以及在投资者保护方面的积极作用。     

Foreign and Local Institutional Ownership and the Speed of Price Adjustment

Abstract:  This paper examines the relation between the speed of price adjustment and stock ownership by foreign and local institutional investors using data from the Korean stock market. We show that returns of stocks with high foreign institutional ownership lead returns of stocks with low foreign institutional ownership, especially after foreign ownership restriction is lifted. Likewise, returns of stocks with high local institutional ownership lead returns of stocks with low local institutional ownership. These results support the idea that foreign institutional (local institutional) investors have faster access to or processing power of new information than local institutional (local individual) investors.     

The influence of corporate social responsibility on investment efficiency and innovation

We examine two important channels through which corporate social responsibility (CSR) affects firm value: investment efficiency and innovation. We find that firms with higher CSR performance invest more efficiently: these firms are less prone to invest in negative net present value (NPV) projects (overinvestment) and less prone to forego positive NPV projects (underinvestment). We also find that firms with higher CSR performance generate more patents and patent citations. Mediation analysis indicates that firms with higher CSR performance are more profitable and valuable, consequences partially attributable to efficient investments and innovation. These results, robust to alternate model specifications, lend support to enlightened stakeholder theory.     

The implied cost of equity capital,corporate investment and chief executive officer turnover

This study investigates how the cost of equity capital, along with corporate investment, affects chief executive officer (CEO) turnover decisions. We hypothesize that the cost of equity conveys information about firm performance uncertainty that is informative of CEO talent. Consistently, our empirical results show that the likelihood of CEO turnover is positively associated with the implied cost of equity, after controlling for earnings and stock performance measures and risk factors. Additional analysis of reverse causality supports the causal effect of the high cost of equity on CEO dismissals. We also find that the positive association is more pronounced for firms that are more likely to suffer from underinvestment problems. These results suggest that the cost of equity plays a more important role in assessing CEO performance when the firm needs more external equity capital to pursue investment opportunities.     

On Foreign Shareholdings and Agency Costs: New Evidence from China

This article examines the impact of foreign shareholdings on agency costs of Chinese firms from 2006 to 2012. The empirical results indicate that: (1) direct foreign shareholdings, in contrast to indirect foreign shareholdings, improve asset utilization, suggesting low agency costs; (2) qualified foreign institutional investors play a significant role in firms because they are less subject to political pressure, which is consistent with lower agency costs, but this effect could be eroded by government control; and (3) foreign shareholdings reduce the cost of equity and improve firm performance. The results contribute to the privatization of state-owned enterprises and the domestic/foreign ownership structure of firms.     

The warning of haze: weather and corporate investment

This paper investigates whether air quality affects corporate investment. Using a sample of Chinese A‐share listed firms from 2007 to 2013, this paper finds that poor air quality is negatively associated with corporate investment and reduction of corporate investment due to air pollution intensifies with manager risk aversion. In addition, this paper provides evidence against the alternative explanation that corporate investment decreases due to government air‐quality regulations. Furthermore, this paper also suggests that poor air quality is negatively associated with investment efficiency. These findings complement existing literature on how weather conditions affect corporate financial decisions.     

The Volatility of Return Revisions and Financial Statement Literacy in Emerging Markets: The Case of Cross‐listed Chinese Firms

Are foreign investors in emerging markets more financial statement literate than domestic investors? If so, this conjecture implies that foreign (domestic) investors are more likely to revise their return expectations to cash flow (discount rate) news. It also implies that cash flow news and discount rate news are likely to be uncorrelated when evaluating return revisions by domestic investors, whereas cash flow news and discount rate news are likely to be negatively correlated when evaluating return revisions by foreign investors. The Chinese equity markets yield robust empirical results that are consistent with both hypotheses.     

Birds of a feather flock together: Institutional investors with disciplinary history and financial reporting

This study examines the role of financial misconduct of institutional investors on financial reporting quality of investee firms. We find that the firms held by institutional investors with disciplinary history (IDH) are more likely to engage in financial misreporting. Our results are not driven by institutional investor characteristics such as activism, incentives to monitor, investment horizon, or portfolio size. The impact of IDH is stronger in the firms that are more likely to engage in financial misreporting (i.e., the firms that barely meet analysts’ expectations and with CEOs with higher career concerns). IDH have stronger impact on financial misreporting when the institution reports multiple disciplinary events, the disciplinary event is recent, or disciplinary action is taken against the institutional investor company rather than just its affiliates. Results continue to hold after implementing various statistical tests to address potential endogeneity issues and alternative measures of financial misreporting.     

The impact of tax on foreign direct investment: Empirical evidence and the implications for tax integration schemes

We estimate the impact of taxation on foreign direct investment (FDI) flows, using data on flows between seven countries for 1984 through 1989, and a sophisticated measure of the cost of capital. We find that the choice between domestic investment and total outward FDI is not significantly affected by taxation but that taxation does affect the location of outward FDI. These results are used to examine the impact of tax integration systems. Giving a tax credit to foreign shareholders may induce a large increase in inward FDI from exemption countries but not from partial-credit countries. For the United States, the total effect would be small.     

不良贷款高企：形成机理与制度重构——以A市农信社为例

2003年启动的农信社改革成效明显,目前农信社系统整体不良贷款率处于合理区间。但部分农信社尽管采取了完善法人治理、不良贷款稀释等多种方式和手段,不良贷款率仍处于很高的水平。本文对A市农信社不良贷款形成机理、担保及担保创新的有效性、不良贷款稀释的负面效应等进行了分析,探讨了农信社信用放款的可行性,并针对贷款＂合谋＂行为提出了基于＂双第一责任人＂的制度重构思路。在当前银行信贷资产质量整体下滑的背景下,希望对于商业银行防范信贷风险、控制不良贷款上升有所裨益。     

Excess Control, Corporate Governance and Implied Cost of Equity: International Evidence

We investigate whether the separation between ownership and control rights can be costly to controlling shareholders and firms in terms of capital-raising costs. Using estimates of the cost of equity capital implied by analyst earnings forecasts and growth rate for a sample of 1,207 firms from nine Asian and 13 Western European countries, we find strong, robust evidence that the cost of equity is increasing in excess control, while controlling for other firm-level characteristics. This core finding persists after controlling for legal institutions variables.     

The impact of corporate fraud on director‐interlocked firms: Evidence from bank loans

We examine the impact of corporate fraud committed by one firm (the “fraudulent firm”) on other firms with interlocking directors (the “interlocked firms”), focusing on the debtholder side. We argue that the revelation of a fraudulent firm's fraud can damage the reputation of the interlocked firms because corporate governance can propagate via director interlocks. Empirically, we find that the interlocked firms' cost of debt is higher and the loan covenants become stricter after the fraud cases of the fraudulent firms are revealed. Consistent with the corporate governance propagation explanation, our results are weaker (stronger) for interlocked firms that have better (worse) pre‐event corporate governance standards. Our findings suggest that corporate fraud of fraudulent firms can affect other firms through director‐interlocks beyond shareholder value.     

我国区域利用外资的结构、问题与对策——以湖南省为例

2009-2018年湖南利用外资的产业结构、来源结构、地区分布结构、方式结构发生了积极的变化,同时也存在亟待改进的问题:产业结构中第一产业比重小,来源结构中过于倚重港台资金,地区分布集中于京广铁路线,独资企业占比太重等。为此,坚持不懈地推进统筹兼顾的引资战略,提升引资引技过程中自主创新的程度,注重疫情防控中引资环境的营造,以促进湖南外资工作持续快速长远发展。