Do financial constraints in an unstable emerging economy mitigate the opportunistic behavior of entrenched family owners?

Prior research is not conclusive whether information asymmetries or managerial discretion are the cause of observed investment-cash flow sensitivity. This paper examines the effect of family firms' governance heterogeneity on firm's investment-cash flow sensitivity in Brazil. The Brazilian economic and corporate governance context present several idiosyncratic features, including weak minority shareholder protection, an underdeveloped capital market, macro-economic uncertainties, the presence of controlling shareholders (especially families), and the excessive use of control-enhancing mechanisms, allowing us to explore in greater detail the drivers of investment-cash flow sensitivity. We find that investment is more sensitive to cash flow for firms with a highly entrenched family presence (divergence between corporate control and voting rights coupled with family management) than in less entrenched family firms. This result emerges primarily due to financial constraints from asymmetric information, rather than agency problems of free cash flow from abuse of managerial discretion. Our findings shed new light on the role of excessive control rights in investment decisions, allowing family managers to reallocate capital to cope with financial constraints in times of economic uncertainties.     

The impact of venture capital on family businesses: Evidence from Spain

We analyzed growth in family and non-family Spanish venture capital-backed firms. When the venture capital (VC) firm does not hold a majority stake, the usual risk aversion attitudes in family firms may lead to conflicts between the management cultures of the existing and new shareholders, which may affect growth. We found lower firm growth after the initial round in family firms only when the investor holds a minority stake. Our results may explain the under-representation of family firms in VC portfolios and highlight the need to align the objectives of family managers and VC investors before the initial VC round.     

Profitability of politically corrupt firms: Evidence from Romania

Extending the twin-agency problem model, this paper shows that political corruption affects firms by empowering the controlling shareholders and thereby intensifying agency conflicts within selected firms instead of simple political extractions. The fact that controlling shareholders of politically corrupt firms divert more resources from their firms explains the inferior accounting performance despite the well-documented benefits of political connections. Moreover, a higher degree of diversion does not result in a value discount due to the increased value of control. These are demonstrated by evidence from a unique series of political events in Romania in 2015.     

上市公司控制权类型、治理机制与代理成本——家族企业与非家族企业的比较分析

本文采用2006年1329家上市公司的数据,分析治理机制对代理成本的影响,对家族企业与非家族企业治理机制的影响效果进行比较分析.研究结果发现,对全体上市公司而言,大股东持股比例、机构投资者持股比例、流动负债比例与代理成本呈负相关,股权制衡度、两职合一、资产负债率与代理成本呈正相关,董事会规模、独立董事比例与代理成本的关系不显著;家族企业治理机制对代理成本的影响效果比非家族企业要弱.在非家族企业中,大股东持股比例、股权制衡度、两职合一与代理成本有显著的相关性,但上述治理机制对家族企业的代理成本没有显著影响.     

数字金融的公司治理效应--基于非家族股东治理视角

非家族股东治理能够有效助力家族企业实现可持续发展与现代化转型的目标,因而提升非家族股东治理水平具有重要意义。数字金融作为传统金融发展模式的重要创新,能够实现“金融服务实体经济”的目标,促使非家族股东积极参与家族企业治理。基于此,本文以代理理论与社会情感财富理论为基础,探讨了数字金融对非家族股东治理的影响。实证检验发现,随着数字金融的发展,非家族股东治理水平不断提升。其作用机制在于,数字金融能够通过缓解代理冲突、弱化家族控制与强化传承意愿,提升非家族股东治理水平。拓展性分析发现,对于非创业型、融资约束较强、位于金融监管程度较强地区的家族企业来说,数字金融对非家族股东治理的积极效应更显著;数字金融对异质性非家族股东制衡度存在差异化影响,即相较于外资股东与机构股东制衡度,数字金融能够强化国有股东与民营股东对家族股东的制衡;数字金融能够通过提升非家族股东治理水平促进家族企业可持续发展。本文从数字金融视角探究非家族股东治理的动机,丰富了数字金融与非家族股东治理的相关研究。     

The value of family control during political uncertainty: Evidence from Thailand's constitutional change in 2014

We examine the effect of family control on firm value and corporate decision during Thailand's constitutional change arising from the 2014 coup d'état. We find that Thai family firms perform poorly when compared to non-family firms during the period of political uncertainty. The effect is more pronounced when firms have high expected agency costs from outside investors. Further, we find that family firms delay their investments, hold less cash, pay smaller dividends and have poorer access to debt financing sources relative to non-family firms. The reductions in investment and financing activities may at least partially account for their underperformance. Our evidence is consistent with the view that family control enhances firms' survivorship by establishing political connections in times of political uncertainty at the expense of minority shareholders.     

Corporate governance,ownership and firm value: Drivers of ownership as a good corporate governance mechanism

This study analyses the role of ownership as a good corporate governance mechanism. We study cross-national differences between companies with different level of investor protection. In addition, we account for the type of owner (young family vs. non-young family businesses) and the owner’s relationship with a second significant shareholder (monitoring vs. collusion). When the main owner has effective control over the firm (i.e., absolute control or less than absolute control but without the control of a second significant shareholder), the relation between ownership concentration and firm value is U-shaped. Our findings also suggest that the conflicts between majority and minority shareholders are weaker for companies with higher investor protection and young family-owned businesses.     

会计政策变更、信号传递与代理成本

在股权分散的上市公司中,存在着全体股东与经营者之间的单层委托代理关系,而在股权集中的上市公司中,存在着大股东与经营者、中小股东与大股东之间的双重委托代理关系。将会计政策变更作为一个可观测变量,针对股权分散和股权集中的两类上市公司,分别建立单委托、双重委托代理模型,分析降低代理成本、提高公司价值的途径。分析结果表明,在两类上市公司中,将会计政策变更作为一种信号传递机制写入激励合同,可以降低代理成本,提高公司价值。     

Corporate governance and investment sensitivity to policy uncertainty in Brazil

In this study, I investigate the role of corporate governance on the relationship between investment and economic policy uncertainty (EPU). Exploring the Brazilian context of poor investor protection, high private benefits of control and premium listing segments, I provide evidence that the negative impact of EPU on investment is stronger for well-governed firms. The moderating effect of corporate governance on investment-EPU sensitivity is present in companies with different levels of financial constraints and investment irreversibility. My findings support the view that controlling owners prefer riskier investments when expropriating minority shareholders and stricter governance practices may mitigate such an opportunistic behavior.     

Determinants of asymmetric loss recognition timeliness in public and private firms in Brazil

We investigate the determinants of asymmetric loss recognition timeliness (ALRT) for public and private firms in Brazil. We complement Ball and Shivakumar (2005) by investigating ALRT in Brazil where, unlike in the UK setting, equity markets do not provide the adequate incentives for high quality financial reporting. In Brazil, even listed public companies do not face the same institutional environment of the British firms. Using a unique database of Brazilian public and private firms we document that Brazilian public and private firms present similar ALRT, different from the evidence that Ball and Shivakumar (2005) reported for the UK.     

Effects of Foreign Institutional Ownership on Foreign Bank Lending: Some Evidence for Emerging Markets

Despite the large literature on developed countries, little is known about the interactions between corporate governance, foreign ownership, and foreign bank lending in developing countries. Using data from five Latin American countries from 2001 to 2008, we provide one of the first pieces of evidence of how foreign ownership affects the loan cost of borrowers in emerging markets. We find that in terms of foreign bank lending, the cost of debt financing is significantly higher for firms whose largest shareholder is a foreign institutional one. The results support the hypothesis that because of potential agency conflicts between shareholders and creditors, having block institutional shareholders tend to increase the borrowers’ debt burden. There is further evidence supporting this agency conflict hypothesis as we find that the effects of large institutional shareholders on borrowing costs become larger (smaller) when the conflicts are aggravated (mitigated).     

Family Control,Socioemotional Wealth and Earnings Management in Publicly Traded Firms

We examine the unique nature of agency problems within publicly traded family firms by investigating the earnings management decision of dominant family owners relative to non-family. To do so, we draw upon literature demonstrating that family owners are loss averse with respect to the family’s socioemotional wealth, or the affective endowment derived from firm ownership and control. Our theory and findings suggest that potential reputational consequences of earnings management lead family principals to engage in less of this practice relative to non-family firms, and that founder family firms are less likely than non-founder family firms to use earnings management. Moreover, the family-firm effect varies with the firm size, the degree of CEO entrenchment, and the firm’s stock structure. We provide important insights regarding differences between family and non-family principals in the use of unethical accounting practices, thereby extending agency theory and advancing an underdeveloped research area.     

控股股东控制、管理层激励与公司过度投资

本文基于我国上市公司大小股东间严重代理冲突、控股股东政府性质,以及股权分置改革的制度背景,从公司过度投资的视角对管理层激励效应进行理论分析,并以2004-2009年上市公司为样本,检验了控股股东两权分离程度及其性质对于管理层激励抑制过度投资效应的影响。研究发现,不论是货币薪酬激励还是管理层持股激励都起到了抑制过度投资的作用,但上市公司控股股东的两权分离程度会削弱管理层激励的这种治理效应;而且,公司的政府控制性质在弱化管理层激励抑制过度投资作用的同时,还会强化控股股东两权分离对管理层激励效应的负面影响。考虑股权分置改革影响的进一步研究表明,股改强化了管理层激励对于公司过度投资的抑制作用,同时又弱化了控股股东的两权分离对管理层激励治理效应的负面影响。研究结果不仅为现有文献关于管理层激励与企业绩效关联的结论分歧提供新的解释,对于理解我国上市公司管理层激励的有效性,以及切实改进管理层激励契约等,具有重要参考价值,同时也从新的视角为我国股改的有效性提供了证据。     

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.     

Firm boundaries,incentives, and fund performance: Evidence from a private pension fund system

The private pension fund system in Turkey presents a unique institutional structure where bank holding companies can own both private pension companies and asset management firms. More often than not, pension companies delegate their operational mandates to the asset management arm of the same bank. This practice exposes the retail investor to a double agency problem and raises questions about conflicts of interest and fiduciary duty. Our analysis reveals that the funds set up and managed under the same bank holding company perform worse on a risk-adjusted basis than the funds with an arm's length relationship between the pension company and the asset manager. We show that this relative underperformance is not simply a bank effect; bank-affiliated pension companies and asset managers do just as well, if not better than their peers, when they are not operating under the same roof. Unfortunately, this inefficient institutional structure is not eliminated by market discipline because these funds attract more flows from retail investors, and the underperformance is not discernible in raw returns.     

Time Allocation and Performance: The Case of Chinese Entrepreneurs

This paper analyses the effect of time allocation on the financial performance of entrepreneurial firms. We apply the Lewbel estimator to a pooled data set of Chinese private manufacturing firms that are managed by their owners. Time is allocated between management, networking, and study activities. After accounting for endogeneity, we find an inverted U-shaped relationship between management hours and firm performance and between networking and firm performance. However, no relationship between time spent studying and firm performance is observed. We also find that the managing hours–performance relationship is particularly strong for companies managed by entrepreneurs who own more than 75% of share, for companies that are managed by owners with previous experience, for male entrepreneurs, and for smaller-sized firms.     

融资约束抑或代理冲突? 上市公司非效率投资动因研究

本文利用投资价值效应的一般原理对我国上市公司的非效率投资产生的原因及其表现形式重新进行了审视和研究。研究发现,无论是国有控股公司还是非国有控股公司,公司经营业绩均与其投资支出呈现出倒U型的曲线关系,且投资支出比例分别在0.47727和0.36971时公司经营业绩达到最高。倒U型曲线关系表明我国上市公司的非效率投资既包含投资不足,又存在过度投资,因而是融资约束和代理问题共同作用的结果。     

Does an IFRS adoption increase value relevance and earnings timeliness in Latin America?

This study analyzes whether changing from local to international accounting standards improves the quality of accounting for Latin American companies. In particular, we aim to identify whether fundamental accounting variables are more relevant and increase earnings timeliness after companies adopt the International Financial Reporting Standards. This research was conducted during 2000–2014 using a sample of 923 companies from Argentina, Brazil, Chile, and Mexico. Employing panel data and quantile regression, our findings show that changes from local accounting regulations to internationally approved standards increase the value relevance. In addition, the results suggest the presence of earnings timeliness in large firms.     

股东网络能提高企业创新绩效吗？——两类代理成本的中介效应研究

以中国2010年至2019年沪深A股上市公司为样本,运用社会网络分析(SNA)方法,研究股东网络、两类代理成本与企业创新绩效之间的关系。结果表明,股东网络有利于企业创新绩效的提高,两类代理成本在股东网络与企业创新绩效之间有部分中介效应。同时发现,第一类代理成本的中介效应低于第二类代理成本的中介效应,原因在于第一类委托代理关系中股东网络降低了股东与高管之间的信息不对称,进一步降低了第一类代理成本,从而提升了企业的创新绩效;而在第二类委托代理关系中股东网络较大幅度地增加了中小股东的谈判能力,进而降低了大股东对中小股东的剥削程度,也就降低了第二类代理成本,进而也提升了企业的创新绩效,但是第一类代理成本的降低可能小于第二类代理成本的降低。这一研究深化了股东网络与企业创新绩效的认知,细分了两类代理成本的作用机制。     

Family firms and corporate social performance: evidence from Korean firms

This study examines the effects of family firms on the corporate social performance of Korean firms and analyses how their effect varies depending on the presence of family CEOs or chaebols. Based on the agency theory, we find that family firms exhibit lower corporate social performance. In particular, there is no difference in the performance of related stakeholders, such as society, consumers, environment, and employees, compared to non-family firms, but corporate governance registers as low performance. We further find that family firms managed by family CEOs show lower corporate social performance, whereas chaebol firms show higher corporate social performance.