We conducted a nationwide field experiment in China to evaluate the direct and indirect impacts of assigning firms to public or private citizen appeals treatments when they violate pollution standards. There are three main findings. First, public appeals to the regulator through social media substantially reduce violations and pollution emissions, while private appeals cause more modest environmental improvements. Second, experimentally adding “likes” and “shares” to social media appeals increases regulatory effort, suggesting visibility as an important mechanism. Third, treatment pollution reductions are not offset by control firm increases, based on randomly varying the proportion of treatment firms at the prefecture-level.

This paper examines the predictive power of trading volume for Chinese equity premium. High (low) trading volume significantly predicts subsequent high (low) equity premium in Chinese stock market in- and out-of-sample. The predictability of trading volume remains significant after controlling for a large number of China economic variables. The predictive power of trading volume is economically important from an asset allocation perspective. Overall, our study suggests that trading volume should be used in conjunction with economic variables to further enhance the Chinese equity premium predictability.

This study examines the role of regional develop imbalance on China’s mutual funds investment behaviours after controlling for various firm attributes. Consistent with evidence from developed markets, we find that China’s mutual funds prefer large liquid stocks with better governance arrangement, higher visibility, growth perspective and prudent features. More importantly, our results show that macroeconomic conditions of stock locations affect mutual funds investment decisions. In particular, mutual funds overweight stocks from the emerging inland regions in response to the “development campaign of the western regions”, and they are able to pick out the “Western Stars” to obtain superior performance. Further investigation of stocks from the nine coastal regions suggests that there exists an “invest towards the neighbour south” phenomenon within the developed coastal regions. Although mutual funds are rational by investing into their southern neighbours, the reason of this anomaly remains a puzzle for further investigation.

This paper examines a board's decision to hire a star CEO and analyzes the consequences of this decision for firm performance. We propose a new methodology to identify star CEOs by analyzing the texts contained in 18,240 Wall Street Journal news articles. Unlike previous measures, our new metric accounts for the time series variations of executives’ visibility as well as how favorably these executives are portrayed in the business press. The proposed measure indicates that boards with short industry tenure or busy boards are more likely to select a star CEO. Consistent with previous evidence, firms that hire star CEOs perform subsequently worse than firms that hire non-star CEOs. However, in contrast to previous work, we show that this underperformance is attributable to boards with short industry tenure or busy boards, rather than the inabilities of star CEOs. Furthermore, our event studies of stock market reactions to hiring news imply that investors prefer star CEOs selected by boards with long industry tenure. Our work contributes to the literature by offering insights into how board composition affects firm performance.

With the expansion of multinational corporations (MNCs), the alarming upsurge in widely publicized and notable corporate scandals involvingMNCs in emerging markets has begun to draw both academic and managerial attention to look beyond home market practices to the pressing concern of CSR in emerging markets. Previous studies on CSR have focused primarily on Western markets, reserving limited discussions in addressing the issue of MNC attitudes and CSR practices in their emerging host markets abroad. Despite this incongruity in academic response to CSR in emerging markets, managers of multinational companies continue to face mounting and most often conflicting pressures to weigh among multiple strategic CSR responses in emerging markets. Such a task is often further complicated by the complexity of varying business norms and standards, regulatory environments, and stakeholder demands for CSR across national boundaries. With such a challenge in mind, I attempt to examine the explanatory factors in leading MNCs, otherwise recognized for accountability and integrity in their home markets, to employ inconsistent or negligent practices under CSR pressure in Chinese emerging economy. Preliminary findings reveal that discrepancies exist in how MNCs perform in CSR in home countries versus in host countries. While MNCs do have much to improve, the institutional environment in the emerging market, including the legal framework and the ethical culture, also needs to be improved by the host country governments, the industry associations, and local firms. Meanwhile, media interest and journalists, NGOs, third party monitors, industry stakeholders as well as consumer advocacy groups can raise the visibility of MNC’s contradictory practices between their origin nations and countries with emerging economies and offer the pressures and incentives for MNCs to amend their ethical shortcomings. This article also suggests implications for both theory and practice.