Institutional conditions,economic policy uncertainty and foreign institutional investment in China

This paper investigates the influence of host and home country institutional conditions on foreign institutional investment. Utilizing longitudinal and multilevel data on foreign institutional investment in Chinese listed firms between 2004 and 2017, we document that foreign institutional investment decreases with increasing economic policy uncertainty in the host nation. We also find that foreign institutional investors respond more strongly to local economic policy uncertainty when their home nations are closer to China, are culturally and administratively similar to China, operate a smaller domestic stock market, and have weaker minority shareholder protection. The impact of economic policy uncertainty on foreign institutional investment is also stronger when the host nation institution is more developed and open.. Moreover, we reveal the mediating role of stock market volatility on this relationship. Overall, we document that foreign institutional investment is not only shaped by institutional conditions in the host country but also influenced by home country characteristics that define geographical and institutional distance between home and host nations.     

Corporate governance and investment-cash flow sensitivity: Evidence from emerging markets

Controlling for country-level governance, we investigate how firms' corporate governance influences financing constraints. Using firm-level corporate governance rankings across 14 emerging markets, we find that better corporate governance lowers the dependence of emerging market firms on internally generated cash flows, and reduces financing constraints that would otherwise distort efficient allocation of investment and destroy firm value. Additionally and more importantly, firm-level corporate governance matters more significantly in countries with weaker country-level governance. This suggests substitutability between firm-specific and country-level governance in determining a firm's investment sensitivity to internal cash flows.     

Corporate Governance in Brazil

Corporate governance is an issue of growing importance in developing economies, as many firms pass through significant transformations due to the combined forces of sociopolitical changes, technological progress and economic trends toward globalization. These elements, along with the structural characteristics of developing economies such as less developed capital markets and governmental interventionism, draw a picture for corporate governance practices that may, in some aspects, be fundamentally different from the practices found in European or North American contexts. In this paper we review and discuss the state of corporate governance practices in Brazil, focusing on how the governance structure of Brazilian firms has been subjected to important changes in the recent past and how even more changes are expected to happen.     

Bringing complexity and convergence governance to consumer policy

Consumer policy is already being shaped by a combination of governance models. This position paper argues that complexity‐oriented convergence models are a timely addition. Modern day consumer policy is characterized as interactive and integrative, replete with shifting boundaries and coalitions and evolving roles for each of state, market and society. This paper focused on governance in the consumer policy arena, arguing that this process needs to acknowledge and reconcile complexity. After describing the basic tenets of complexity theory, two characteristics of contemporary tri‐sector interaction (i.e., sector blurring and sector distortion) were discussed. These boundary characteristics necessitate the need for approaches that can accommodate complexity during consumer policy governance. Three examples of the latter were profiled: sector convergence, network governance and cross‐sector governance. These conceptualizations accommodate the dynamics, complexity and emergence of contemporary consumer policy governance.     

Dual-class unifications and corporate governance in Brazil

We investigate dual-class unifications in a period following the successful inception of a premium single-class listing segment. Firms that unified increased their market liquidity. Investment opportunities and shareholder rights convergence drove unification of firms that later joined the new premium list. Financial constraints impelled unification firms that remained in the least demanding list. All unified firms that joined the new list remained there five years later. Half of the others delisted or were in serious financial distress. The motivations for unification may differ according to the ability of firms to improve their corporate governance and transparency later.     

Economic policy uncertainty and fund flow performance sensitivity: Evidence from New Zealand

Utilizing a large sample of actively managed equity funds and a recently developed EPU index for New Zealand, we show that fund flow performance sensitivity decreases with policy uncertainty. The role of policy uncertainty as a determinant of fund flow performance sensitivity is found to be stronger, particularly for funds with global focus, large sized funds, high momentum funds and those with high idiosyncratic volatility and low downside risk. The findings support the argument that high policy uncertainty dampens investors' ability to process information that allows them to distinguish fund manager skill from luck. The results remain strong after accounting for various macroeconomic factors.     

Corporate governance in mutual insurance companies

The key corporate governance issues facing mutual insurance company managements are examined. Results of a comprehensive survey of the state of corporate governance in mutual property-liability insurance companies are presented. Recommendations for changes in governance practices by mutual companies are presented and their implications are discussed.     

Corporate governance and family business performance

Family business continuity plans commonly establish a governance structure for the family and for the family business. The purpose of those structures is to improve strategy and control mechanisms of the family business and, to organize the communication and relationship between family owners and business executives. This research focuses on assessing the impact of those structures on family business performance. Specifically, the study assesses the impact a professional board of directors has on a company's performance. The research team selected a set of 22 family businesses. Some of these families have undergone a process of developing a family protocol over the last seven years. The authors captured the relevant information for this research by sending out a survey to each family member and to each non-family director or executive.     

Corporate governance and MNE strategies in emerging economies

We explore factors of convergence and divergence in corporate governance of emerging and developed market economies, focussing on the role of firm internationalisation. In particular, foreign investments by emerging economy firms led to upgrade of their governance capabilities. These firms also became advocates for home-country policy reforms that mandated the development of similar capabilities for local firms. We present a broad overview of the literature and propose an approach that considers the evolution of corporate governance, both at the national level and the firm level, with MNEs from both emerging market economies and developed economies as active actors in this process.     

Corporate governance and accounting conservatism in Islamic banks

We examine whether Islamic banks are more likely to be conservative in their financial reporting than conventional banks, as well as how Islamic banks' unique corporate governance system affects accounting conservatism behaviors. Using a large sample of Islamic banks and their matched non‐Islamic banks; based on total assets and geographic location, in 15 countries, we find Islamic banks are more likely to deploy accounting conservatism as measured by loss avoidance, abnormal loan loss provisions, and C‐score, respectively. Islamic banks are about 95% more likely to be more conservative in accounting practices than their counterparts, depending on different model specifications. In addition, we report several board characteristics, such as size, independence, reputation, tenure, and diversity, are important determinants of accounting conservatism in Islamic banks. This relationship indicates certain board traits lead to greater monitoring roles, consequently reducing unethical behavior and increasing the degree of conservatism in accounting practices.     

浅论我国鼓励对外投资的税收政策分析

国外一些国家政府为了推动本国企业"走出去"纷纷采取了各类财税、金融等扶持政策.这些政策措施的制定,极大地激励了这些国家企业海外投资的积极性.本文作者通过与国外的税收政策的对比,结合我国现阶段国情分析了我国对外投资的税收政策.     

Corporate governance,globalization and firm productivity

We examine the relationship between globalization, corporate governance and firm productivity. The results, using longitudinal data from Korea, indicate that the positive effect of liberalising equity ownership on firms’ total factor productivity (TFP) was reinforced by indirect managerial effects when a firm improved its corporate governance. Our findings also confirm that the interaction of the managerial effect with increased foreign equity ownership is more significant than interaction with exports, suggesting that liberalising foreign investment in the host market is more effective in capitalising on the potential benefits of corporate governance reform than increasing exports to overseas markets, reflected in learning by exporting.     

Corporate governance and insider trading regulation efficiency

This paper aims to measure insider trading probability and the corresponding regulation efficiency in China. Based on an identification of influencing factors of corporate governance, the author explores the relationship among insider trading, corporate governance, and corporate value. The author also uses, based on high-frequency financial data, the probability of insider trading to measure the degree of insider trading in China’s security market. Results reveal that China’s security market has failed to punish and prohibit illegal insider trading effectively. However, the security market does exert certain constraints on insider-trading-ridden listed companies. The conclusion of this article is that by improving corporate governance, we can enhance the efficiency of insider trading regulation. Practical implications are also discussed.     

Corporate governance reforms and our regulatory future

It is undeniable that the global financial crisis (GFC) has been a catalyst for regulatory change. Whether these policies and regulatory changes are good or bad, whether they will help or hinder growth, and whether they can effect proper balance between growth and effective risk management, the reality is that significant regulatory changes have been proposed and many have already been adopted and implemented. Business leaders may argue that the proposed policy and regulatory choices are both bad policy and bad economics, but the conclusions reached from the GFC is that the status quo was unworkable, and is certainly now politically unpalatable. Corporate governance reforms have arisen as a result of the global financial crisis. This article examines a slew of trends and changes in the wake of the GFC.     

The evolution of corporate governance in Brazil

We use extensive hand collected surveys reporting governance practices of Brazilian firms in 2004, 2006, and 2009 to build a broad corporate governance index and analyze the evolution of corporate governance in Brazil and the association between governance and firm value. We find that corporate governance practices improved significantly over this period. This evolution is due to two main factors: 1) growth in Novo Mercado and Level II (NM&L2) listings, mainly through IPOs by new firms, and 2) improved practices at non-NM&L2 firms, principally through adopting governance elements required for NM&L2 listing. Governance practices for firms already listed on NM&L2 were stable. Adoption of the elements of our governance index that are required for NM&L2 listing predicts higher firm value. In contrast, adoption of the remaining elements of our index does not predict firm value. Thus, governance changes appear to respond to investor preferences.     

Determinants of corporate governance practices in Brazil

We study the determinants of Corporate Governance (CG) practices in Brazil. Using hand collected data, we build CG subindices for Board Structure, Board Procedures, Minority Shareholders Rights, and Disclosure, and an overall CG index, BCGI, computed as the average of these four subindices. During our sample period, CG practices changed significantly: improvement was stronger among firms in the High- than Low-CG requirement listings. Tangibility and Liquidity are the only variables that predict CG practices with some consistency. Most importantly, we find no evidence that Tobin's q predicts CG practices. This last result lowers the possibility of reverse causation in analyses that use CG practices as determinant of firm value.     

Corporate governance in emerging markets: A survey

This paper reviews recent research on corporate governance, with a special focus on emerging markets. It finds that better corporate governance benefit firms through greater access to financing, lower cost of capital, better performance, and more favorable treatment of all stakeholders. Numerous studies show these channels to operate at the level of firms, sectors and countries—with causality increasingly often clearly identified. Evidence also shows that voluntary and market corporate governance mechanisms have less effect when a country's governance system is weak. Importantly, how corporate governance regimes change over time and how this impacts firms are receiving more attention recently. Less evidence is available on the direct links between corporate governance and social and environmental performance. The paper concludes by identifying issues requiring further study, including the special corporate governance issues of banks, and family-owned and state-owned firms, and the nature and determinants of public and private enforcement.