This study investigates the impact of CIO on the Environment, Social, and Governance (ESG) performance. Our analysis is based on a panel dataset comprising 2395 Chinese listed companies throughout the period from 2007 to 2020. Evidence from empirical results shows that CIO is positively correlated with ESG performance. In other words, CIO enhance the corporate ESG performance. The issue of endogeneity was duly considered, and appropriate measures were made to address it. Furthermore, robustness tests were conducted, and the findings remained consistent and reliable. The examination of the mechanism indicates that CIO enhance internal control quality that facilitates the advancement of ESG activities within firms. This paper contributes to the existing body of knowledge by examining the impact of external governance systems on the promotion of ESG activities in Chinese enterprises. This study adds to the existing body of scholarship on the implications of Common institutional ownership. Findings recommend several possible policy and economic ramifications that might support Chinese enterprises in their endeavors to incorporate ESG initiatives and contribute to the overall sustainability of society.

According to prospect theory [Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk, Eco- nometrica, 47, 263–292], gains and losses are measured from a reference point. We attempted to ascertain to what extent the refer- ence point shifts following gains or losses. In questionnaire studies, we asked subjects what stock price today will generate the same utility as a previous change in a stock price. From participants’ responses, we calculated the magnitude of reference point adapta- tion, which was significantly greater following a gain than following a loss of equivalent size. We also found the asymmetric adap- tation of gains and losses persisted when a stock was included within a portfolio rather than being considered individually. In studies using financial incentives within the BDM procedure [Becker, G. M., DeGroot, M. H., & Marschak, J. (1964). Measuring utility by a single-response sequential method. Behavioral Science, 9(3), 226–232], we again noted faster adaptation of the reference point to gains than losses. We related our findings to several aspects of asset pricing and investor behavior.

We examined reference point adaptation following gains or losses in security trading using participants from China, Korea, and the US. In both questionnaire studies and trading experiments with real money incentives, reference point adaptation was larger for Asians than for Americans. Subjects in all countries adapted their reference points more after a gain than after an equal-sized loss. When we introduced a forced sale intervention that is designed to close the mental account for a prior outcome, Americans showed greater adaptation toward the new price than their Asian counterparts. We offer possible explanations both for the cross-cultural similarities and the cross-cultural differences.

This study investigates the impact of CIO on the Environment, Social, and Governance (ESG) performance. Our analysis is based on a panel dataset comprising 2395 Chinese listed companies throughout the period from 2007 to 2020. Evidence from empirical results shows that CIO is positively correlated with ESG performance. In other words, CIO enhance the corporate ESG performance. The issue of endogeneity was duly considered, and appropriate measures were made to address it. Furthermore, robustness tests were conducted, and the findings remained consistent and reliable. The examination of the mechanism indicates that CIO enhance internal control quality that facilitates the advancement of ESG activities within firms. This paper contributes to the existing body of knowledge by examining the impact of external governance systems on the promotion of ESG activities in Chinese enterprises. This study adds to the existing body of scholarship on the implications of Common institutional ownership. Findings recommend several possible policy and economic ramifications that might support Chinese enterprises in their endeavors to incorporate ESG initiatives and contribute to the overall sustainability of society.

This paper extends Lerner and Schoar’s (2004) argument on illiquidity puzzle of private equity funds. We examine the roles that investment illiquidity, along with bounded rationality and rent-seeking behavior, plays in private-equity buyouts. Collectively, investors employ club deals to screen out fund managers who might misuse discretionary rights to engage buyout deals. A club deal is launched by a group of private equity firms that pool their assets together, make a joint bid for a buyout target, and monitor the buyout processes collectively. Thus, this paper aims at clarifying whether or not such discretionary rights improve the choice of buyout target by, as well as the performance of private equity funds. We found that the performance of buyout funds persisted and affected the choice of the club deal as the major monitoring mechanism. This paper contributes to our understandings of investment behavior in private equity buyouts as follows. First, the performance of buyout funds has improved for at least two time periods between 1999 and mid-2007. The phenomenon that fund performance affects the choice of club deals is consistent across a variety of private equity funds, such as buyout, venture, growth, and mezzanine funds. Moreover, risk preference does not affect choice of club deals directly; instead, it has a moderating effect on choice of club deals through its interaction with the location of reference point for risk aversion. Finally, both fund size and fund sequence have U-shaped relations to the choice of club deals, while deal value of buyouts is related positively to the choice of club deals.