We examine whether reported ownership–performance relations systematically differ for government versus private ownership by integrating the diverse empirical results for listed corporations in emerging markets. Our meta‐analysis confirms popular perceptions that, compared to private ownership, government ownership is associated with inferior performance. We find that, on average, the underlying ownership–performance relation is negative for government ownership and positive for private ownership, and the difference between these relations is significant. We also find that the positive private ownership–performance relation is stronger for institutional/foreign ownership compared to family/management ownership. Further analysis shows that negative (positive) government (private) ownership and performance relations have weakened (strengthened) over time. Our assessment of the sources of heterogeneity shows that reported relations are biased by estimation methods that fail to adequately control for endogeneity. Our results suggest that the nature of ownership–performance relations in emerging markets remains very dynamic and warrants ongoing research interest.
{"title":"Does Ownership Identity Matter? A Meta‐Analysis of Research on Firm Financial Performance in Relation to Government Versus Private Ownership","authors":"K. Wang, Gregory Shailer","doi":"10.1111/abac.12103","DOIUrl":"https://doi.org/10.1111/abac.12103","url":null,"abstract":"We examine whether reported ownership–performance relations systematically differ for government versus private ownership by integrating the diverse empirical results for listed corporations in emerging markets. Our meta‐analysis confirms popular perceptions that, compared to private ownership, government ownership is associated with inferior performance. We find that, on average, the underlying ownership–performance relation is negative for government ownership and positive for private ownership, and the difference between these relations is significant. We also find that the positive private ownership–performance relation is stronger for institutional/foreign ownership compared to family/management ownership. Further analysis shows that negative (positive) government (private) ownership and performance relations have weakened (strengthened) over time. Our assessment of the sources of heterogeneity shows that reported relations are biased by estimation methods that fail to adequately control for endogeneity. Our results suggest that the nature of ownership–performance relations in emerging markets remains very dynamic and warrants ongoing research interest.","PeriodicalId":417524,"journal":{"name":"FEN: Other International Corporate Finance (Topic)","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134155197","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}
Silicon Valley Venture Capitalist confidence in the Bay Area entrepreneurial environment rose in the final quarter of 2017. The upward change in direction of sentiment was levered to increasing amounts of available funding to support entrepreneurs working to introduce breakthrough technologies that aim to transform industries and change the trajectory of business. Macroeconomic metrics, particularly those tied to recent changes in corporate tax policy, also suggest a dynamic business environment where more corporate resources may be deployed to the development and acquisition of innovation. Record public stock market valuations also provide corporations a richer share currency to acquire innovation, thus providing additional exit opportunities and incentives for entrepreneurs and their venture capital backers.
{"title":"Silicon Valley Venture Capitalist Confidence Index™","authors":"M. Cannice","doi":"10.2139/ssrn.3123885","DOIUrl":"https://doi.org/10.2139/ssrn.3123885","url":null,"abstract":"Silicon Valley Venture Capitalist confidence in the Bay Area entrepreneurial environment rose in the final quarter of 2017. The upward change in direction of sentiment was levered to increasing amounts of available funding to support entrepreneurs working to introduce breakthrough technologies that aim to transform industries and change the trajectory of business. Macroeconomic metrics, particularly those tied to recent changes in corporate tax policy, also suggest a dynamic business environment where more corporate resources may be deployed to the development and acquisition of innovation. Record public stock market valuations also provide corporations a richer share currency to acquire innovation, thus providing additional exit opportunities and incentives for entrepreneurs and their venture capital backers.","PeriodicalId":417524,"journal":{"name":"FEN: Other International Corporate Finance (Topic)","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-02-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115335013","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}
Pub Date : 2018-02-05DOI: 10.1108/S0742-332220180000038007
Nan Jia, Jing Shi, Yongxiang Wang
Abstract We argue that the influence of public stakeholders (the state) and private stakeholders (nonstate social or economic stakeholders) on corporate philanthropy is interdependent, in that satisfying the state may increase the degree of scrutiny and pressure exerted by private stakeholders on the firm, particularly in institutional environments that place few checks and balances on the power of the state – thus creating suspicion that political patronage shelters firms’ social and moral wrongdoing. To test this theory, we examine the circumstances under which politically patronized firms engage more (or less) in corporate philanthropy. Utilizing a dataset that encompasses both publically traded and unlisted private firms in China, we find that corporate philanthropy is negatively associated with political patronage among unlisted firms but positively associated with political patronage among listed firms. These results are consistent with the predictions made based on our theoretical arguments. This chapter aims to foster further discussion regarding the interdependence of the influences exerted by different stakeholders on firms.
{"title":"The Interdependence of Public and Private Stakeholder Influence: A Study of Political Patronage and Corporate Philanthropy in China","authors":"Nan Jia, Jing Shi, Yongxiang Wang","doi":"10.1108/S0742-332220180000038007","DOIUrl":"https://doi.org/10.1108/S0742-332220180000038007","url":null,"abstract":"Abstract \u0000We argue that the influence of public stakeholders (the state) and private stakeholders (nonstate social or economic stakeholders) on corporate philanthropy is interdependent, in that satisfying the state may increase the degree of scrutiny and pressure exerted by private stakeholders on the firm, particularly in institutional environments that place few checks and balances on the power of the state – thus creating suspicion that political patronage shelters firms’ social and moral wrongdoing. To test this theory, we examine the circumstances under which politically patronized firms engage more (or less) in corporate philanthropy. Utilizing a dataset that encompasses both publically traded and unlisted private firms in China, we find that corporate philanthropy is negatively associated with political patronage among unlisted firms but positively associated with political patronage among listed firms. These results are consistent with the predictions made based on our theoretical arguments. This chapter aims to foster further discussion regarding the interdependence of the influences exerted by different stakeholders on firms.","PeriodicalId":417524,"journal":{"name":"FEN: Other International Corporate Finance (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114485483","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}
Pub Date : 2017-12-01DOI: 10.1007/978-981-10-6129-5_10
Matthias Vanhullebusch
{"title":"China’s Development Banks in Asia: A Human Rights Perspective","authors":"Matthias Vanhullebusch","doi":"10.1007/978-981-10-6129-5_10","DOIUrl":"https://doi.org/10.1007/978-981-10-6129-5_10","url":null,"abstract":"","PeriodicalId":417524,"journal":{"name":"FEN: Other International Corporate Finance (Topic)","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116915202","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}
Prior literature finds that audit firm style shapes client financial statement comparability (Francis, Pinnuck, and Watanabe 2014). We expect that engagement partners also shape financial statement comparability, and find that two clients audited by the same engagement auditor have more comparable accruals than two clients audited by different auditors. We also find that engagement auditor past comparability style explains new client comparability with industry peers, suggesting that auditor style persists over time. We uncover that auditor personal traits including gender, experience, qualification, and specialization are associated with higher comparability. Finally, we find that adding the audit-firm, audit-office, and engagement-auditor fixed effects increases the adjusted R2 of our accrual comparability model by 0.6 percent, 1.9 percent, and 10 percent, respectively. Taken together, our findings suggest that the engagement auditors have a distinguishable effect on financial statement comparability that is incremental to the effect of audit firms and offices. Data Availability: All data are publicly available from the sources identified in the text.
先前的文献发现，审计事务所的风格会影响客户财务报表的可比性(Francis, Pinnuck, and Watanabe 2014)。我们预计审计业务合伙人也会影响财务报表的可比性，并发现由同一审计业务审计师审计的两个客户比由不同审计师审计的两个客户拥有更多可比较的应计项目。我们还发现，审计业务审计师过去的可比性风格解释了新客户与行业同行的可比性，这表明审计师的风格会随着时间的推移而持续存在。我们发现，审计师的个人特征，包括性别、经验、资格和专业化与较高的可比性相关。最后，我们发现，加入审计事务所、审计事务所和审计业务审计师固定效应后，应计可比性模型的调整后R2分别提高了0.6%、1.9%和10%。综上所述，我们的研究结果表明，审计业务审计师对财务报表可比性的影响是可区分的，且对审计事务所和办事处的影响是递增的。数据可用性:所有数据均可从文本中确定的来源公开获得。
{"title":"The Effect of Engagement Auditors on Financial Statement Comparability","authors":"Liuchuang Li, Baolei Qi, Jieying Zhang","doi":"10.2139/ssrn.3047631","DOIUrl":"https://doi.org/10.2139/ssrn.3047631","url":null,"abstract":"\u0000 Prior literature finds that audit firm style shapes client financial statement comparability (Francis, Pinnuck, and Watanabe 2014). We expect that engagement partners also shape financial statement comparability, and find that two clients audited by the same engagement auditor have more comparable accruals than two clients audited by different auditors. We also find that engagement auditor past comparability style explains new client comparability with industry peers, suggesting that auditor style persists over time. We uncover that auditor personal traits including gender, experience, qualification, and specialization are associated with higher comparability. Finally, we find that adding the audit-firm, audit-office, and engagement-auditor fixed effects increases the adjusted R2 of our accrual comparability model by 0.6 percent, 1.9 percent, and 10 percent, respectively. Taken together, our findings suggest that the engagement auditors have a distinguishable effect on financial statement comparability that is incremental to the effect of audit firms and offices.\u0000 Data Availability: All data are publicly available from the sources identified in the text.","PeriodicalId":417524,"journal":{"name":"FEN: Other International Corporate Finance (Topic)","volume":"98 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121346229","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 investigates whether the late payment problem exists among corporations in the US. Our results suggest that liquidity shortage and strategic intention are the main causes of late payments. While large firms deliberately take advantage of their market power to “squeeze suppliers”, we do not find any evidence that the same intuition exists among small firms. Instead, liquidity shortages are the main driver behind slow payments in small firms. This paper also finds that financially distressed firms are better off deferring trade credit repayment to avoid potential bankruptcy if they were paying to bank creditors late. As the legal repercussions of doing so are less severe than defaulting on other corporate bond or bank obligations.
{"title":"Squeezing Suppliers or Liquidity Shortage?","authors":"Shumi M. Akhtar, Ye Ye","doi":"10.2139/ssrn.3030517","DOIUrl":"https://doi.org/10.2139/ssrn.3030517","url":null,"abstract":"This paper investigates whether the late payment problem exists among corporations in the US. Our results suggest that liquidity shortage and strategic intention are the main causes of late payments. While large firms deliberately take advantage of their market power to “squeeze suppliers”, we do not find any evidence that the same intuition exists among small firms. Instead, liquidity shortages are the main driver behind slow payments in small firms. This paper also finds that financially distressed firms are better off deferring trade credit repayment to avoid potential bankruptcy if they were paying to bank creditors late. As the legal repercussions of doing so are less severe than defaulting on other corporate bond or bank obligations.","PeriodicalId":417524,"journal":{"name":"FEN: Other International Corporate Finance (Topic)","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127790220","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}
Expertise diversity is expected to enhance the monitoring and advising functions of boards of directors. Yet, little is known about the expertise that actually exists on corporate boards. In this study, we examine the diversity of professional expertise on corporate boards in Australia and implications for shareholder value. We categorise directors by 11 types of professional expertise and find the most common types of expertise are business executives, accountants, bankers, scientists, lawyers and engineers. We find that expertise diversity is primarily related to board size, industry and location. Our analysis also suggests that shareholders benefit when boards diversify their expertise within a subset of specialist business expertise (lawyers, accountants, consultants, bankers and outside CEOs). Further diversity beyond this subset of expertise is associated with lower firm value and performance.
{"title":"The Diversity of Expertise on Corporate Boards in Australia","authors":"Stephen Gray, J. Nowland","doi":"10.1111/acfi.12146","DOIUrl":"https://doi.org/10.1111/acfi.12146","url":null,"abstract":"Expertise diversity is expected to enhance the monitoring and advising functions of boards of directors. Yet, little is known about the expertise that actually exists on corporate boards. In this study, we examine the diversity of professional expertise on corporate boards in Australia and implications for shareholder value. We categorise directors by 11 types of professional expertise and find the most common types of expertise are business executives, accountants, bankers, scientists, lawyers and engineers. We find that expertise diversity is primarily related to board size, industry and location. Our analysis also suggests that shareholders benefit when boards diversify their expertise within a subset of specialist business expertise (lawyers, accountants, consultants, bankers and outside CEOs). Further diversity beyond this subset of expertise is associated with lower firm value and performance.","PeriodicalId":417524,"journal":{"name":"FEN: Other International Corporate Finance (Topic)","volume":"54 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123069971","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}
Pub Date : 2017-05-10DOI: 10.1093/OXFORDHB/9780190614577.013.38
Yong Li, Emery B. Q. Yao
This chapter examines whether and how different types of institutional ties affect new venture performance at different organizational stages. The authors propose that equity ties to government agencies will enhance the speed and returns of initial public offerings (IPOs) but hinder post-IPO market growth. By contrast, equity ties to research institutes will contribute positively to both IPO performance and post-IPO market growth. The authors build their arguments on how the two types of institutional ties meet new ventures’ need to be legitimate and competitive pre- and post-IPO. They test their hypotheses with new ventures in the pharmaceutical and chemical industries that went public in China and find supportive evidence.
{"title":"All Ties are Not Created Equal: Institutional Equity Ties, IPO Performance, and Market Growth of New Ventures","authors":"Yong Li, Emery B. Q. Yao","doi":"10.1093/OXFORDHB/9780190614577.013.38","DOIUrl":"https://doi.org/10.1093/OXFORDHB/9780190614577.013.38","url":null,"abstract":"This chapter examines whether and how different types of institutional ties affect new venture performance at different organizational stages. The authors propose that equity ties to government agencies will enhance the speed and returns of initial public offerings (IPOs) but hinder post-IPO market growth. By contrast, equity ties to research institutes will contribute positively to both IPO performance and post-IPO market growth. The authors build their arguments on how the two types of institutional ties meet new ventures’ need to be legitimate and competitive pre- and post-IPO. They test their hypotheses with new ventures in the pharmaceutical and chemical industries that went public in China and find supportive evidence.","PeriodicalId":417524,"journal":{"name":"FEN: Other International Corporate Finance (Topic)","volume":"71 4","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120855852","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 examines how tax policy should be designed to best encourage entrepreneurial activity in start-up firms. We begin by describing several presumed market failures affecting entrepreneurial firms that would lead to an under-provision of entrepreneurial activity: 1) information spillovers from innovations in entrepreneurial firms to other firms, 2) positive externalities to consumers from innovative new products sold by these firms, and 3) lemons problems in the market for both debt and equity issued by these firms. We then analyze the degree to which various tax policy measures can alleviate these failures. A key complication we focus on is the inability of the government to observe which, and the degree to which, any given start-up firm is entrepreneurial. This forces policy to target behavioral differences between entrepreneurial and non-entrepreneurial start-ups. We presume that start-up firms, to the degree they are entrepreneurial, face upfront costs in developing and marketing a new technology, and in the process face substantial risk. Our analysis then suggests the use of refundable tax savings from business losses in start-ups together with a compensating surtax on the profits of start-ups (needed in the case of lemons problems) to help alleviate the various market failures faced by entrepreneurial start-ups.
{"title":"How Should Taxes Be Designed to Encourage Entrepreneurship?","authors":"Roger H Sarada, R. Gordon","doi":"10.2139/ssrn.2896431","DOIUrl":"https://doi.org/10.2139/ssrn.2896431","url":null,"abstract":"This paper examines how tax policy should be designed to best encourage entrepreneurial activity in start-up firms. We begin by describing several presumed market failures affecting entrepreneurial firms that would lead to an under-provision of entrepreneurial activity: 1) information spillovers from innovations in entrepreneurial firms to other firms, 2) positive externalities to consumers from innovative new products sold by these firms, and 3) lemons problems in the market for both debt and equity issued by these firms. We then analyze the degree to which various tax policy measures can alleviate these failures. A key complication we focus on is the inability of the government to observe which, and the degree to which, any given start-up firm is entrepreneurial. This forces policy to target behavioral differences between entrepreneurial and non-entrepreneurial start-ups. We presume that start-up firms, to the degree they are entrepreneurial, face upfront costs in developing and marketing a new technology, and in the process face substantial risk. Our analysis then suggests the use of refundable tax savings from business losses in start-ups together with a compensating surtax on the profits of start-ups (needed in the case of lemons problems) to help alleviate the various market failures faced by entrepreneurial start-ups.","PeriodicalId":417524,"journal":{"name":"FEN: Other International Corporate Finance (Topic)","volume":"78 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114985919","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}
We study the influence of country expertise of investment banks in facilitating cross-border merger deals by analyzing a large international sample of M&A deals. We provide evidence that the geographical proximity, cultural affinity, and local experience of investment banks advising bidding firms on cross-border M&A deals significantly decrease the time to completion required to complete the deal, significantly increase the probability of completion of the deal and the operating performance of the acquiring firm after the deal. The cultural affinity between the bank and the target country and the expertise of the acquirer on the target country have also a significant positive effect on the stock market reaction at the announcement of the deal. Our results are robust to firm, deal, country specific factors, and endogeneity concerns.
{"title":"Investment Bank Expertise in Cross-Border Mergers and Acquisitions","authors":"Matteo P. Arena, Michaël Dewally","doi":"10.2139/ssrn.2698417","DOIUrl":"https://doi.org/10.2139/ssrn.2698417","url":null,"abstract":"We study the influence of country expertise of investment banks in facilitating cross-border merger deals by analyzing a large international sample of M&A deals. We provide evidence that the geographical proximity, cultural affinity, and local experience of investment banks advising bidding firms on cross-border M&A deals significantly decrease the time to completion required to complete the deal, significantly increase the probability of completion of the deal and the operating performance of the acquiring firm after the deal. The cultural affinity between the bank and the target country and the expertise of the acquirer on the target country have also a significant positive effect on the stock market reaction at the announcement of the deal. Our results are robust to firm, deal, country specific factors, and endogeneity concerns.","PeriodicalId":417524,"journal":{"name":"FEN: Other International Corporate Finance (Topic)","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-01-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130415501","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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