This paper systematically analyzes the impact of monetary policy on non-financial enterprises’ leverage differentiation under bank credit discrimination, taking advantage of data provided by non-financial listed companies from 2007 to 2017. The results show that bank credit discrimination will enlarge the leverage differentiation between state-owned enterprises and non-financial enterprises, and this effect is more significant in the enterprises with political connections and government subsidies, in the regions with low market-oriented allocation of economic resources, inefficient government administration and high financing costs. Compared with moderately loose monetary policy, tightening monetary policy will enlarge the degree of leverage differentiation between state-owned enterprises and non-state-owned enterprises; however, the moderation of monetary policy, increase in the bankers’ confidence index and greater effectiveness of the central bank will weaken the positive effect of monetary policy on the leverage differentiation of state-owned enterprises and non-state-owned enterprises to some extent. Further discussions find that bank credit discrimination will enlarge the degree of financial leverage differentiation between state-owned enterprises and non-state-owned enterprises whether in the period of loose monetary policy or tightening monetary policy, but has no significant effect on operational leverage differentiation. Hence, we identify the phenomenon of non-financial enterprises’ financialization and disassociation of finance from the real economy at this stage from the perspective of fund usage. Policy implications are that monetary policy should be accounted for in the process of de-leveraging, central bank communication should be strengthened and public expectations stabilized. At the same time, regulators should pay attention to the structural leverage differentiation among heterogeneous enterprises.
{"title":"Monetary Policy, Ownership Discrimination and Leverage Differentiation of Non-financial Enterprises","authors":"Xun Han, Sichao Ma, Sara Hsu, Yuyan Jiang","doi":"10.2139/ssrn.3688713","DOIUrl":"https://doi.org/10.2139/ssrn.3688713","url":null,"abstract":"This paper systematically analyzes the impact of monetary policy on non-financial enterprises’ leverage differentiation under bank credit discrimination, taking advantage of data provided by non-financial listed companies from 2007 to 2017. The results show that bank credit discrimination will enlarge the leverage differentiation between state-owned enterprises and non-financial enterprises, and this effect is more significant in the enterprises with political connections and government subsidies, in the regions with low market-oriented allocation of economic resources, inefficient government administration and high financing costs. \u0000 \u0000Compared with moderately loose monetary policy, tightening monetary policy will enlarge the degree of leverage differentiation between state-owned enterprises and non-state-owned enterprises; however, the moderation of monetary policy, increase in the bankers’ confidence index and greater effectiveness of the central bank will weaken the positive effect of monetary policy on the leverage differentiation of state-owned enterprises and non-state-owned enterprises to some extent. Further discussions find that bank credit discrimination will enlarge the degree of financial leverage differentiation between state-owned enterprises and non-state-owned enterprises whether in the period of loose monetary policy or tightening monetary policy, but has no significant effect on operational leverage differentiation. Hence, we identify the phenomenon of non-financial enterprises’ financialization and disassociation of finance from the real economy at this stage from the perspective of fund usage. Policy implications are that monetary policy should be accounted for in the process of de-leveraging, central bank communication should be strengthened and public expectations stabilized. At the same time, regulators should pay attention to the structural leverage differentiation among heterogeneous enterprises.","PeriodicalId":119086,"journal":{"name":"ERN: Other Institutions & Transition Economics: Firm Governance (Topic)","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127039554","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Russian Abstract: В работе рассматриваются различные аспекты измерения государственного сектора в экономике, а также влияние размера государственного вмешательства на эффективность деятельности как корпоративного сектора, так и развитие фондового рынка. Показано, что государственный сектор в России растет по целой совокупности различных мер. Кроме того, получены оценки государственного сектора для выборки стран и выявлено негативное их влияние на все меры развития фондового рынка: капитализацию, объемы биржевых торгов акциями и размеры финансовых активов домашних хозяйств. Было показано, что изменения показателей капитализация/ ВВП, объем биржевых торгов акциями / ВВП и стоимости финансовых активов домашних хозяйств по отношению к располагаемому ими доходу зависит не только от экономических, финансовых и демографических факторов, но и от той роли которую в экономике играет государство.
English Abstract: The paper considers various aspects of measuring the public sector in the economy, as well as the impact of the size of government intervention on the performance of both the corporate sector and the development of the stock market. It is shown that the public sector in Russia is growing by a whole set of different measures. In addition, public sector estimates were obtained for a sample of countries and their negative impact on all stock market development measures was revealed: capitalization, stock exchange trading volumes and household financial assets. It was shown that changes in capitalization / GDP, the volume of exchange trading in shares / GDP and the value of household financial assets in relation to their disposable income depends not only on economic, financial and demographic factors, but also on the role that the state plays in the economy.
俄罗斯Abstract:它考虑了公共部门在经济中的不同方面，以及公共干预对企业和股市发展的影响。俄罗斯的公共部门正在采取各种措施。此外，公共部门对各国进行抽样评估，并显示它们对所有股市发展措施的影响:资本配置、股票交易规模和家庭金融资产的规模。报告显示，资本/ gdp指标的变化、股票/ gdp和家庭财务资产相对于现有收入的价值不仅取决于经济、金融和人口因素，还取决于国家在经济中的作用。英国广播公司:《经济危机》中宣传公开赛的内容，就像政府在股票市场上的互动一样。这是俄罗斯公共sector在一个不同的环境中成长的机会。在addition，公共sector为所有股票市场开发提供了一种激励:资本主义、股票交易所和国内金融资产。It was shown that changes in capitalization / GDP、the volume of exchange trading in shares / GDP and the value of household financial assets in relation to their disposable收入depends not only on economic financial and demographic豁免权,but also on the play in the经济= that the state。
{"title":"Влияние государственной собственности на эффективность деятельности компаний и их активность на российском фондовом рынке (The Influence of State Ownership on the Efficiency of Companies and Their Activity in the Russian Stock Market)","authors":"Alexander E. Abramov, A. Radygin, M. Chernova","doi":"10.2139/ssrn.3594461","DOIUrl":"https://doi.org/10.2139/ssrn.3594461","url":null,"abstract":"<b>Russian Abstract:</b> В работе рассматриваются различные аспекты измерения государственного сектора в экономике, а также влияние размера государственного вмешательства на эффективность деятельности как корпоративного сектора, так и развитие фондового рынка. Показано, что государственный сектор в России растет по целой совокупности различных мер. Кроме того, получены оценки государственного сектора для выборки стран и выявлено негативное их влияние на все меры развития фондового рынка: капитализацию, объемы биржевых торгов акциями и размеры финансовых активов домашних хозяйств. Было показано, что изменения показателей капитализация/ ВВП, объем биржевых торгов акциями / ВВП и стоимости финансовых активов домашних хозяйств по отношению к располагаемому ими доходу зависит не только от экономических, финансовых и демографических факторов, но и от той роли которую в экономике играет государство.<br><br><b>English Abstract:</b> The paper considers various aspects of measuring the public sector in the economy, as well as the impact of the size of government intervention on the performance of both the corporate sector and the development of the stock market. It is shown that the public sector in Russia is growing by a whole set of different measures. In addition, public sector estimates were obtained for a sample of countries and their negative impact on all stock market development measures was revealed: capitalization, stock exchange trading volumes and household financial assets. It was shown that changes in capitalization / GDP, the volume of exchange trading in shares / GDP and the value of household financial assets in relation to their disposable income depends not only on economic, financial and demographic factors, but also on the role that the state plays in the economy.","PeriodicalId":119086,"journal":{"name":"ERN: Other Institutions & Transition Economics: Firm Governance (Topic)","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126218236","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
V. Sesar, K. Buntak, Ivana Martinčević, Saša Bogović
Strategic controlling has become an imperative in business planning and determining company’s long-term goals. Companies use different managerial tools in their planning process in order to determine possible threats and opportunities in their business environment. The goal of the paper is to present a case study of one pharmaceutical Croatian company using the model INDUSTRUCT, which is utilized for analysing industrial environment, which is, develop based on the Porter's five forces model. Although recent research results show that companies in Croatia use more often operational tools in their business rather than strategic tools this model shows the simplicity of its use and easiness of analyse. Focus of the research is highly competitive rivalry in pharmaceutical industry characterized with the big threats from supplier, buyers, substitutes, as well as newcomers. In such highly competitive industry, companies must constantly rethink their strategies and use tools that will help them detect threats and opportunities hiding in their environment.
{"title":"Industry Structure in Developing Company's Long-Term Business Strategy","authors":"V. Sesar, K. Buntak, Ivana Martinčević, Saša Bogović","doi":"10.2139/ssrn.3283102","DOIUrl":"https://doi.org/10.2139/ssrn.3283102","url":null,"abstract":"Strategic controlling has become an imperative in business planning and determining company’s long-term goals. Companies use different managerial tools in their planning process in order to determine possible threats and opportunities in their business environment. The goal of the paper is to present a case study of one pharmaceutical Croatian company using the model INDUSTRUCT, which is utilized for analysing industrial environment, which is, develop based on the Porter's five forces model. Although recent research results show that companies in Croatia use more often operational tools in their business rather than strategic tools this model shows the simplicity of its use and easiness of analyse. Focus of the research is highly competitive rivalry in pharmaceutical industry characterized with the big threats from supplier, buyers, substitutes, as well as newcomers. In such highly competitive industry, companies must constantly rethink their strategies and use tools that will help them detect threats and opportunities hiding in their environment.","PeriodicalId":119086,"journal":{"name":"ERN: Other Institutions & Transition Economics: Firm Governance (Topic)","volume":"186 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131424797","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using a large sample of privatized firms, we find that state ownership is significantly positively associated with the use of bank debt financing, suggesting that privatized firms benefit from the soft budget constraint associated with state ownership. We further find that the relation is more pronounced in countries with high government ownership of banks, high corruption in bank lending, a left-oriented government, and a collectivist national culture, which provides additional support for the soft-budget-constraint view. Finally, in external validity tests, we find that state ownership affects other aspects of debt structure, such as debt maturity and debt security.
{"title":"State Ownership and Debt Choice: Evidence from Privatization","authors":"Narjess Boubakri, W. Saffar","doi":"10.2139/ssrn.2943229","DOIUrl":"https://doi.org/10.2139/ssrn.2943229","url":null,"abstract":"Using a large sample of privatized firms, we find that state ownership is significantly positively associated with the use of bank debt financing, suggesting that privatized firms benefit from the soft budget constraint associated with state ownership. We further find that the relation is more pronounced in countries with high government ownership of banks, high corruption in bank lending, a left-oriented government, and a collectivist national culture, which provides additional support for the soft-budget-constraint view. Finally, in external validity tests, we find that state ownership affects other aspects of debt structure, such as debt maturity and debt security.","PeriodicalId":119086,"journal":{"name":"ERN: Other Institutions & Transition Economics: Firm Governance (Topic)","volume":"58 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116181767","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The present investigation was conducted in Kolhapur district of Maharashtra. The study showed a reduction in the operational efficiency of the selected PACS during the post-economic reform period as against the pre-economic reform period. The operational efficiency was measured in respect of various liquidity ratio, profitability ratios and financial leverage ratios. Not only the selected societies showed a decline in their current ratio, rate of return on assets, return on owner’s equity and marginal efficiency of capital (MEC) but also higher dependency on lender’s capital for their finances. This dependency was seen to be higher in the case of ‘A’ graded society. Nonetheless, ‘A’ graded society showed an improvement in its permanent capital during the latter period as against the former period. On the other hand, permanent capital position of ‘B’ graded society had declined during the latter period. Further, in the case of ‘A’ graded society there was not much improvement in the net worth, and in fact the share of net worth in its total liability had declined in the post-economic reform period. The declining share of net worth had caused an increase in debt-asset ratio of this society during the latter period as against the former period. In fact, among various ratios, the most important ratio estimated in this study was the return on owner’s equity. The estimated return on owner’s equity of the selected societies were seen to fall sharply during the post-economic reform period. Since the return on owner’s equity is a function of as to how efficiently a firm manages its assets, the net profit margin on sales and the degree of financial leverage, a reduction in return on equity of the selected societies could, therefore, be considered as a sign of reduction in the efficiency of the societies in managing their assets and liabilities, and also income and expenditure pattern during the latter period as against the former period.
{"title":"Institutional Reforms in India and Dwindling Viability of Primary Cooperative Credit Societies","authors":"D. Shah","doi":"10.2139/ssrn.2885336","DOIUrl":"https://doi.org/10.2139/ssrn.2885336","url":null,"abstract":"The present investigation was conducted in Kolhapur district of Maharashtra. The study showed a reduction in the operational efficiency of the selected PACS during the post-economic reform period as against the pre-economic reform period. The operational efficiency was measured in respect of various liquidity ratio, profitability ratios and financial leverage ratios. Not only the selected societies showed a decline in their current ratio, rate of return on assets, return on owner’s equity and marginal efficiency of capital (MEC) but also higher dependency on lender’s capital for their finances. This dependency was seen to be higher in the case of ‘A’ graded society. Nonetheless, ‘A’ graded society showed an improvement in its permanent capital during the latter period as against the former period. On the other hand, permanent capital position of ‘B’ graded society had declined during the latter period. Further, in the case of ‘A’ graded society there was not much improvement in the net worth, and in fact the share of net worth in its total liability had declined in the post-economic reform period. The declining share of net worth had caused an increase in debt-asset ratio of this society during the latter period as against the former period. In fact, among various ratios, the most important ratio estimated in this study was the return on owner’s equity. The estimated return on owner’s equity of the selected societies were seen to fall sharply during the post-economic reform period. Since the return on owner’s equity is a function of as to how efficiently a firm manages its assets, the net profit margin on sales and the degree of financial leverage, a reduction in return on equity of the selected societies could, therefore, be considered as a sign of reduction in the efficiency of the societies in managing their assets and liabilities, and also income and expenditure pattern during the latter period as against the former period.","PeriodicalId":119086,"journal":{"name":"ERN: Other Institutions & Transition Economics: Firm Governance (Topic)","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-12-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121985911","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Subordination of business to political influence has remains pervasive in China. We construct a Schumpeterian-type model of growth with managerial time allocation between productive activities and building up political connections. The model predicts the impact of different patterns of state ownership and/or political connectedness on firm productivity linked to a period of liberalization. We then investigate the relationship between political connections, state ownership, and total factor productivity (TFP) using firm-level data for China between 1998 and 2007. We find, consistent with the model, that the firms with the highest levels of TFP had low levels of political affiliation and/or state ownership.
{"title":"Political Connections, State Ownership and Productivity in China","authors":"Richard D. F. Harris, N. Hashimzade, Sai Ding","doi":"10.2139/ssrn.2905671","DOIUrl":"https://doi.org/10.2139/ssrn.2905671","url":null,"abstract":"Subordination of business to political influence has remains pervasive in China. We construct a Schumpeterian-type model of growth with managerial time allocation between productive activities and building up political connections. The model predicts the impact of different patterns of state ownership and/or political connectedness on firm productivity linked to a period of liberalization. We then investigate the relationship between political connections, state ownership, and total factor productivity (TFP) using firm-level data for China between 1998 and 2007. We find, consistent with the model, that the firms with the highest levels of TFP had low levels of political affiliation and/or state ownership.","PeriodicalId":119086,"journal":{"name":"ERN: Other Institutions & Transition Economics: Firm Governance (Topic)","volume":"08 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127441037","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the relationship between cross-listing and managerial compensation of Chinese firms that concurrently issued A- & B-shares or A- & H-shares during 2001-2010. The results show that executive compensation is a positive factor to motivate Chinese A-share firms to cross-list as B- or H-shares; it implies that cross-listings could be employed as a way of asset appropriation at the managers’ discretion. The results also confirm that corporate governance is important in determining cross-listings. Under the weak corporate governance institution, Chinese firms were chosen to cross-list based on political considerations rather than on economic merits, serving as a vehicle to signal the quality of state owned enterprises (SOEs). The results are drawn on agency theory, signalling hypothesis and bonding hypothesis.
{"title":"On the Determinants of Chinese Cross-Listings: Are B-Shares Different from H-Shares?","authors":"Yongli Luo","doi":"10.2139/ssrn.2467610","DOIUrl":"https://doi.org/10.2139/ssrn.2467610","url":null,"abstract":"This study examines the relationship between cross-listing and managerial compensation of Chinese firms that concurrently issued A- & B-shares or A- & H-shares during 2001-2010. The results show that executive compensation is a positive factor to motivate Chinese A-share firms to cross-list as B- or H-shares; it implies that cross-listings could be employed as a way of asset appropriation at the managers’ discretion. The results also confirm that corporate governance is important in determining cross-listings. Under the weak corporate governance institution, Chinese firms were chosen to cross-list based on political considerations rather than on economic merits, serving as a vehicle to signal the quality of state owned enterprises (SOEs). The results are drawn on agency theory, signalling hypothesis and bonding hypothesis.","PeriodicalId":119086,"journal":{"name":"ERN: Other Institutions & Transition Economics: Firm Governance (Topic)","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132747749","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper explains why monopolists do not necessarily obtain profit. It also reveals the true picture of average cost pricing. It concludes that protected businesses must eventually become both stupid and wasteful, and that state-owned monopolists are the ugliest one.
{"title":"The Ugly Monopoly Theory: The Average-Cost Pricing Tyranny","authors":"Hak Choi","doi":"10.2139/SSRN.2456525","DOIUrl":"https://doi.org/10.2139/SSRN.2456525","url":null,"abstract":"This paper explains why monopolists do not necessarily obtain profit. It also reveals the true picture of average cost pricing. It concludes that protected businesses must eventually become both stupid and wasteful, and that state-owned monopolists are the ugliest one.","PeriodicalId":119086,"journal":{"name":"ERN: Other Institutions & Transition Economics: Firm Governance (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122466550","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Williamson argues that a principal will only trust an agent when there are safeguards to ensure the agent has an incentive for trustworthiness. However, such circumstances are devoid of vulnerability and possibility for betrayal. Williamson claims that this is not trust at all. I argue that a principal can be calculative in her decisions to trust an agent but be genuinely vulnerable to betrayal as well. The key is in distinguishing between an environment of risk and one of uncertainty. Uncertainty creates vulnerabilities for principals because of the difficulty in identifying and erecting safeguards that fully assure agent trustworthiness. In such conditions, a principal will also need to rely on the moral disposition of the agent to refrain from engaging in opportunistic behaviour. However, a reliance on moral dispositions creates the possibility of real betrayal. Thus, in an environment of uncertainty, a reliance on the moral dispositions of others means you can have your trust and calculativeness, too.
{"title":"You Can Have Your Trust and Calculativeness, Too: Uncertainty, Trustworthiness and the Williamson Thesis","authors":"Harvey S. James, Jr.","doi":"10.2139/ssrn.2351870","DOIUrl":"https://doi.org/10.2139/ssrn.2351870","url":null,"abstract":"Williamson argues that a principal will only trust an agent when there are safeguards to ensure the agent has an incentive for trustworthiness. However, such circumstances are devoid of vulnerability and possibility for betrayal. Williamson claims that this is not trust at all. I argue that a principal can be calculative in her decisions to trust an agent but be genuinely vulnerable to betrayal as well. The key is in distinguishing between an environment of risk and one of uncertainty. Uncertainty creates vulnerabilities for principals because of the difficulty in identifying and erecting safeguards that fully assure agent trustworthiness. In such conditions, a principal will also need to rely on the moral disposition of the agent to refrain from engaging in opportunistic behaviour. However, a reliance on moral dispositions creates the possibility of real betrayal. Thus, in an environment of uncertainty, a reliance on the moral dispositions of others means you can have your trust and calculativeness, too.","PeriodicalId":119086,"journal":{"name":"ERN: Other Institutions & Transition Economics: Firm Governance (Topic)","volume":"65 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129411673","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using a sample of 50 largest Chinese banks during the period of 2003–2010, we explore a comprehensive set of board characteristics (size, composition and functioning of the board) and analyze their impacts on bank performance and bank asset quality in China. We find that the number of board meetings and the proportion of independent directors have significantly positive impacts on both bank performance and asset quality while board size has a significantly negative impact on bank performance. We find new evidence that the degree of bank boards’ political connection is negatively correlated with bank performance and asset quality. The findings suggest that the board of directors plays a significant role in bank governance in China.
{"title":"Board Characteristics and Chinese Bank Performance","authors":"Q. Liang, P. Xu, P. Jiraporn","doi":"10.2139/ssrn.2251496","DOIUrl":"https://doi.org/10.2139/ssrn.2251496","url":null,"abstract":"Using a sample of 50 largest Chinese banks during the period of 2003–2010, we explore a comprehensive set of board characteristics (size, composition and functioning of the board) and analyze their impacts on bank performance and bank asset quality in China. We find that the number of board meetings and the proportion of independent directors have significantly positive impacts on both bank performance and asset quality while board size has a significantly negative impact on bank performance. We find new evidence that the degree of bank boards’ political connection is negatively correlated with bank performance and asset quality. The findings suggest that the board of directors plays a significant role in bank governance in China.","PeriodicalId":119086,"journal":{"name":"ERN: Other Institutions & Transition Economics: Firm Governance (Topic)","volume":"75 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-04-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128307880","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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