Many studies report that government-owned banks under-perform the private banks but no studies examine the reasons of this stylized fact empirically in emerging countries during 1993~2007. This study fulfills this gap. For simplicity, the under-performance of government banks is referred to as the GOB effect. Two matching theories, Nearest-Neighbor Matching (Nearest) and Mahalanobis Metric Matching (Mahala), are adopted to seek matched banks sharing similar characteristic variables located in the same countries. We propose three hypotheses, strong policy role hypothesis, weak policy role hypothesis and no policy role hypothesis, which classifies government-owned banks as having strong, weak and no policy roles, to explain the above phenomenon. Regarding to why GOB effects are commonly observed in emerging countries, this study find that government-owned banks, after being mandated to merge with a distressed or non-distressed bank, suffer adverse performance, supporting strong and weak policy role hypothesis. On the contrary, this study also finds government-owned banks undertaking no policy role perform equally as private-owned banks on average, supporting no policy role hypothesis. Next, by supporting the above three hypotheses, we suggest that political considerations indeed depress government bank performance and the GOB effect in emerging countries are coming from the policy roles influence.

Using a sample of Chinese family firms from 2000 to 2007, we investigate whether the political connection of the family firms will help them to reduce the frictions they face in external financing in a relationship-based economy. We find that political connectedness of family firms could reduce their investment-cash flow sensitivity. More interestingly, this political connectedness effect exists only in financially constrained family firms. However, from governance dimension, we cannot find any significant variation of the political connection effect on the sensitivity of investment to cash flow. We argue that these evidences are consistent with the firm’s underinvestment arising from the asymmetric information problems, and are inconsistent with the firm’s overinvestment arising from the free-cash-flow problems.

This paper provides comprehensive description of the practice of corporate executive perquisites (perks) in China, a leading emerging economy. We find that expenses and cash payment related to corporate executive perquisites far exceed the monetary payment to top executives, consistent with the notion that perquisites are used more extensively in emerging markets to motivate and reward corporate executives. In addition to common factors known to influence the level of executive perks, we find a significantly positive link between bank ownership of company shares and executive perquisites. Further analyses suggest that higher level of executive perquisites hurt company operating efficiency and may result from the conflict of interests that banks face as both lenders and shareholders in the emerging markets: banks may choose to side with corporate executives and play less effective monitoring if they are concerned with the security of their loans.

This study conducts a firm-level analysis of the impact that the gender diversity of boards of directors has on corporate philanthropic responses to disasters. We predict a negative relationship between diversity and philanthropic contribution; as the relationship is stronger in listed firms with a better-developed institutional environment. Data were collected on the philanthropic responses of listed Chinese firms to the 5.12 Wenchuan earthquake in 2008. These data support the hypothesized negative relationship and show that it is stronger in higher level vs. lower level marketization environments; the relationship is weaker in listed firms with average gender diversity that have political connections. We also find evidence that agency cost theory explains corporate philanthropic disaster response much better than strategic philanthropic theory since women on boards of directors do not facilitate corporate donation process but rather evaluate the benefits of corporate responses to disasters. These benefits depend on the level of marketization and separation from the government, especially for listed firms with average gender diversity in China. These constructive results provide the first examination of the moderating role of institutional environment on the relationship between gender diversity and corporate philanthropic behaviors. We discuss the implications of this work for further research on diversity considering the interaction with the corporate context.

This paper attempts to address two questions: First, what is the relationship between a firm’s provision of incentives for its CEO and the CEO’s decision autonomy? Second, how does the CEO’s decision autonomy affect firm performance? Results from a simple principal‐agent model suggest that the relationship between CEO’s decision autonomy and incentive provision may vary across different decisions. We conduct our empirical analysis using World Bank Investment Climate Survey data from China. Our results show that: (i) firm’s use incentive compensation is negatively associated with CEO’s investment decision autonomy but positively associated with labor decision autonomy; and (ii) after controlling for the use of incentive compensation, CEO’s investment decision autonomy dampens, while labor decision autonomy boosts the firm’s performance. We conjecture that different level of agency costs associated with investment decision and labor decision might explain the above distinction.

Applying the principle of the bonding theory, this study examined the relationship between corporate governance practice and performance of Chinese firms that are listed in the major international stock exchanges, including NASDAQ, New York, Hong Kong, Singapore and London AIM markets, and further investigated whether the Chinese firms that adopted the corporate governance mechanisms of the stock exchanges where they are listed would outperform those of firms listed locally in the Chinese stock exchange that operates in a weak enforcement mechanism environment. Hypotheses are tested using cross sectional data. The empirical tests show a mixed result. The cross-listings in New York and NASDAQ (dual-listing is excluded) exhibit bonding premium, while those noncross- listed Chinese firms demonstrated better firm performance that those listed in London, Singapore, and Hong Kong. Further, the study shed some lights on the relative importance of various corporate governance mechanisms in enhancing the firm performance in the context of the dominance of state-owned-enterprises in the market. The results reveal that different market has different corporate governance mechanisms under its different macro-environments. For the overall Chinese listings, the second largest shareholder of a firm could play a role as an effective corporate governance mechanism in increasing the firm’s performance. A negative relationship between the size of the board and the corporate governance was found. For those cross-listed Chinese firms, by adopting the stringent financial disclosure and the famous auditing firms could increase the firm performance, but not good enough comparing to these non-cross-listed Chinese firms. Meanwhile, controlling shareholder has negative effect on firm performance for the cross-listed Chinese firms. The study suggests that merely borrowing corporate governance mechanism does not guarantee the improvement of corporate governance (further to its firm performance), rather, firm’s own background and country effects also matter.

In this study we examine the incentives for listed family controlled firms in China to establish political connections and their organizational structure as measured by shareholding concentration and composition of board of directors. We hypothesize and find that listed family firms are more likely to establish political connections when the local markets are less developed and the governments are more powerful in allocating economic resources. In particular, firms are more likely to build political connections when local governments suffer from severe budgetary deficits, when they tend to rely on discretionary charges and administrative penalties for raising revenues, and when they have more leeway in granting business subsidies. We also find that controlling shareholders of family firms with political connections tend to concentrate their shareholding and dominate the board of directors so that they can make deals with government officials in secrecy and enjoy the benefits exclusively among themselves.

Friedman et al. (2003) developed a model in which, in equilibrium, controlling shareholders may choose either tunneling or propping depending on the magnitude of an adverse shock and the magnitude of the private benefits of control. In this paper, we employ connected transaction data from China to test the implications of their model. We hypothesize that, when listed companies are financially healthy (in financial distress), their controlling shareholders are more likely to conduct connected transactions to tunnel (prop up) their listed companies and the market reacts unfavorably (favorably) to the announcement of these transactions. Our empirical findings strongly support our hypotheses. Our analysis supports Friedman et al.’s (2003) model by furnishing clear evidence that it is possible that propping and tunneling might occur in the same company but at different times.

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本文拟对沪深两市36家上市公司季报公布前后股票收益率变动情况进行研究。基于FFJR在1969年的文献中所提及的事件研究方法。发现每天的异常收益率在事件窗口中表现比较平稳，而每天累积的异常收益则具有明显的趋势，投资者在季报公布前后能获得显著的异常收益。反映出我国资本市场尚未达到半强有效，文章在最后指出一国应加强资本市场独立性的建设，有利于增强资本市场对宏观经济周期的超前预示作用。