Suchergebnisse

AbstractManuscript TypeEmpiricalResearch Question/IssueThis study analyses which type of institutional investors constrains accruals management using a sample ofUKlisted firms in the period of 1997–2010.Research Findings/ResultsEmpirical results show that block‐holding levels, investment strategies, and investment durations influence institutional investors' role in constraining accruals management of the investee firms. Institutional investors with 10–20 percent ownership, adopting an active investment strategy, and having moderate investment duration significantly decrease the probability of income‐inflating abnormal accruals but increase the probability of income‐deflating abnormal accruals. In addition, these three aspects have a significant joint impact on accruals management. Even after considering the interaction among the three aspects of institutional investors, 10–20 percent block‐holding and moderate investment duration remain as significant driving forces on the constraint of accruals management by institutional investors. Further tests are conducted for sub‐sample periods of 2001–2005 and 2007–2009. Institutional investors with an active investment strategy and moderate investment duration are better motivated to constrain accruals management ofUKfirms during 2001–2005 when there were vigorous regulatory changes in corporate governance. Institutional investors with a passive investment strategy and short investment duration encouraged accruals management during the recent financial crisis (2007–2009).Theoretic/Academic ImplicationsThe findings of the paper provide some much needed clarity to the mixed evidence in the extant literature on the role of institutional investors in constraining accruals management. Block‐shareholding level, investment strategies, and the actual investment duration are valid dimensions to reflect their heterogeneous incentives in monitoring managerial discretions in accruals management. Institutional investors are a complex group of diverse types of financial institutions and would be more appropriately analyzed with multiple dimensions in future research on their monitoring of managerial discretion.Practitioner/Policy ImplicationsThis study underpins the concern ofUKpolicymakers over the short‐term investment orientation of institutional investment by showing that institutional investors with less than one year investment duration significantly encourage accruals manipulations. Policymakers may pay attention to the three aspects, as identified in the present paper, of institutional investors in terms of enhancing shareholder engagement with their investee firms.

AbstractManuscript TypeEmpiricalResearch Question/IssueThis study analyses whether institutional investment in China is affected by the voluntary corporate social performance (CSP) of firms, after controlling for ownership structure, corporate governance, compensation, and other firm characteristics.Research Findings/InsightsFirms with superior voluntary CSP attract more institutional investment, which remains robust after controlling for the reverse causality problem. Mutual funds are the main driver of the institutional investment pattern in China and they invest more in firms that achieve better voluntary CSP with respect to employment equality and customer care. Insurance companies and social security funds invest more in firms that take care of their customers. Qualified foreign institutional investors (QFIIs) are the only type of institutional investors tilting their investment in favor of firms doing well at saving energy.Theoretical/Academic ImplicationsOur empirical evidence suggests that different types of institutional investors show preferences toward different aspects of investee firms' voluntary CSP. We innovatively separate firms' voluntary CSP into expected components that can be explained by firm characteristics and unexpected components (surprises) that cannot be explained by firm characteristics. Although institutional investors, in general, and mutual funds and QFIIs, in particular, own more shares in firms with more voluntary CSP surprises, only mutual funds trade on them in the subsequent year.Practitioner/Policy ImplicationsForeign institutional investors invest more in firms with better voluntary CSP, especially with respect to energy‐saving and environmental issues, but they do not show a significant preference toward firms with better corporate governance in China. Our paper offers implications for policy makers in transitory and emerging economies with regard to encouraging foreign institutional investors' equity investment.

State-owned enterprises (SOEs) play a crucial role in China's economy. Those directly controlled by the central government (CSOEs) take leading positions almost in all industries in China. In this paper, we analyse the impacts of internal control quality of CSOEs on related party transactions and corporate value of CSOEs after the Chinese government introduced regulatory changes and the split share structure reform. Current literature offers little empirical evidence in this area. The primary information collected from 167 questionnaires responded by 22 CSOEs is analysed using structural equation models. We find that internal controls of a higher quality reduce unfair related party transactions for private benefits at the cost of corporate value and hence increase the corporate value of CSOEs. However, the overall perception of the internal control quality of CSOEs is not satisfactory with a mean of 5.3174 based on a seven-point Likert scale. This indicates that effective implementation of internal control is critical for CSOEs after setting up regulations and systems.

State-owned enterprises (SOEs) play a crucial role in China's economy. Those directly controlled by the central government (CSOEs) take leading positions almost in all industries in China. In this paper, we analyse the impacts of internal control quality of CSOEs on related party transactions and corporate value of CSOEs after the Chinese government introduced regulatory changes and the split share structure reform. Current literature offers little empirical evidence in this area. The primary information collected from 167 questionnaires responded by 22 CSOEs is analysed using structural equation models. We find that internal controls of a higher quality reduce unfair related party transactions for private benefits at the cost of corporate value and hence increase the corporate value of CSOEs. However, the overall perception of the internal control quality of CSOEs is not satisfactory with a mean of 5.3174 based on a seven-point Likert scale. This indicates that effective implementation of internal control is critical for CSOEs after setting up regulations and systems.

Abstract State-owned enterprises (SOEs) play a crucial role in China's economy. Those directly controlled by the central government (CSOEs) take leading positions almost in all industries in China. In this paper, we analyse the impacts of internal control quality of CSOEs on related party transactions and corporate value of CSOEs after the Chinese government introduced regulatory changes and the split share structure reform. Current literature offers little empirical evidence in this area. The primary information collected from 167 questionnaires responded by 22 CSOEs is analysed using structural equation models. We find that internal controls of a higher quality reduce unfair related party transactions for private benefits at the cost of corporate value and hence increase the corporate value of CSOEs. However, the overall perception of the internal control quality of CSOEs is not satisfactory with a mean of 5.3174 based on a seven-point Likert scale. This indicates that effective implementation of internal control is critical for CSOEs after setting up regulations and systems.

China's recent promotion of Corporate Social Responsibility (CSR) has coincided with a marked increase in the number of Chinese listed firms attracting female board members and foreign equity investors. Using Rankins' (RKS) ratings over the 2009 to 2013 period, we show that greater gender balance in top-management supports stronger CSR performance. This finding broadens gender-based accounts emphasizing social networks (Westphal and Milton, 2000), Critical Mass Theory (Kramer et al., 2006; Bear et al., 2010; and Soares et al., 2011) and team dynamics (Woolley et al., 2010; and Hoogendoorn et al., 2013). Findings also reveal stronger CSR performance in firms where a female officer is present at the CEO and/or vice-CEO level. Female leadership thus appears to be just as important as gender mix in driving CSR change. Our findings shed new light and add further dimension to the nascent literature on gender and CSR-engagement in China (Lau et al., 2016; and Liao et al., 2016). We examine whether a political-networking motivation underlies foreign investment (Du and Girma, 2010; Liu et al., 2014a; Lin et al., 2015; and Jiang and Kim, 2015). We argue that qualified foreign institutional investors (QFIIs) deploy social-engagement in non-SOEs to build competitive advantage. But in SOEs, where strong political networks already exist, QFIIs have less incentive to boost CSR ratings. Results indicate little difference in the social ratings of QFII-invested SOEs and non-SOEs. However, CSR scores are increasing in foreign ownership levels in SOEs. By considering offshore ownership, we broaden understanding of how foreign channels influence CSR in China (Tsoi, 2010; Cheung et al., 2014a; and Lau et al., 2016). Additionally, we confirm the Barnea and Rubin (2010) contention of an inversion in social ratings at entrenched managerial ownership levels. Non-linear rating effects also emerge in relation to state ownership (Li et al., 2013). Finally, CSR performance exhibits positive (negative) relation with a listed entity's size and age (leverage and lagged return-on-equity) but virtually no connection with independent board representation.