Pub Date : 2022-05-17DOI: 10.1080/16081625.2022.2077778
Dongshan Ma, Jiayu Zhao, Shengqiang Zhang, Cuifang Wang
ABSTRACT Using a large sample of Chinese A-share listed firms during 2008–2017, this study investigates whether and how the informal hierarchy of independent directors affects two types of agency costs. We find that the informal hierarchy of independent directors is negatively correlated with the two types of agency costs and the negative effect is robust to alternative empirical designs. Moreover, our further research indicates that ownership structure matters for the performance of independent directors. We provide empirical evidence for optimizing the independent director team structure and improving corporate governance.
{"title":"Does the informal hierarchy of independent directors have a corporate governance effect? Evidence from China","authors":"Dongshan Ma, Jiayu Zhao, Shengqiang Zhang, Cuifang Wang","doi":"10.1080/16081625.2022.2077778","DOIUrl":"https://doi.org/10.1080/16081625.2022.2077778","url":null,"abstract":"ABSTRACT Using a large sample of Chinese A-share listed firms during 2008–2017, this study investigates whether and how the informal hierarchy of independent directors affects two types of agency costs. We find that the informal hierarchy of independent directors is negatively correlated with the two types of agency costs and the negative effect is robust to alternative empirical designs. Moreover, our further research indicates that ownership structure matters for the performance of independent directors. We provide empirical evidence for optimizing the independent director team structure and improving corporate governance.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"39 1","pages":"1694 - 1708"},"PeriodicalIF":1.1,"publicationDate":"2022-05-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87149985","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-26DOI: 10.1080/16081625.2022.2067880
Dong Chen, Limin Cheng, Rui Fan, Shangkun Liang
ABSTRACT Labor-cost adjustment has become an increasingly significant factor in enterprise development and economic growth, yet labor costs have proved ‘sticky’: more likely to rise with increasing revenue than fall when revenues decline. Although tax policies play an important role in wage determination, there is little research on how they affect wage stickiness. We treat China’s tax-reforming 2008 Corporate Income Tax Law as a shock and find that increases in nominal tax rates enhance wage stickiness in relation to ordinary employees but not executive compensation. The effect is most pronounced in enterprises with higher long-term debt ratios, state-owned enterprises, and labor-intensive industries.
{"title":"Payroll tax shields and wage stickiness:evidence from China’s 2008 corporate income tax law","authors":"Dong Chen, Limin Cheng, Rui Fan, Shangkun Liang","doi":"10.1080/16081625.2022.2067880","DOIUrl":"https://doi.org/10.1080/16081625.2022.2067880","url":null,"abstract":"ABSTRACT Labor-cost adjustment has become an increasingly significant factor in enterprise development and economic growth, yet labor costs have proved ‘sticky’: more likely to rise with increasing revenue than fall when revenues decline. Although tax policies play an important role in wage determination, there is little research on how they affect wage stickiness. We treat China’s tax-reforming 2008 Corporate Income Tax Law as a shock and find that increases in nominal tax rates enhance wage stickiness in relation to ordinary employees but not executive compensation. The effect is most pronounced in enterprises with higher long-term debt ratios, state-owned enterprises, and labor-intensive industries.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"3 1","pages":"1204 - 1225"},"PeriodicalIF":1.1,"publicationDate":"2022-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89643253","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-22DOI: 10.1080/16081625.2022.2067882
Shaner Chu, Erin Oldford, Changchun Gao
ABSTRACT This study investigates the effect of social capital on financial constraints of Chinese cultural and creative enterprises (CCEs). We disaggregate a firm’s social capital into professional, political, and commercial capital. Our empirical results show that professional social capital can significantly reduce CCEs’ investment-cash flow sensitivity and help gain bank loans, thereby alleviating CCEs’ financial constraints. However, political and commercial social capital do not lessen financial constraints. We also find evidence that intellectual property protection acts to amplify the negative relation between professional social capital and financial constraints. These results are robust to alternative measures of key constructs and model specifications.
{"title":"Does social capital alleviate financing constraints? A study of China’s creative economy","authors":"Shaner Chu, Erin Oldford, Changchun Gao","doi":"10.1080/16081625.2022.2067882","DOIUrl":"https://doi.org/10.1080/16081625.2022.2067882","url":null,"abstract":"ABSTRACT This study investigates the effect of social capital on financial constraints of Chinese cultural and creative enterprises (CCEs). We disaggregate a firm’s social capital into professional, political, and commercial capital. Our empirical results show that professional social capital can significantly reduce CCEs’ investment-cash flow sensitivity and help gain bank loans, thereby alleviating CCEs’ financial constraints. However, political and commercial social capital do not lessen financial constraints. We also find evidence that intellectual property protection acts to amplify the negative relation between professional social capital and financial constraints. These results are robust to alternative measures of key constructs and model specifications.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"227 1","pages":"1518 - 1541"},"PeriodicalIF":1.1,"publicationDate":"2022-04-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77449283","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-21DOI: 10.1080/16081625.2022.2067883
Hao Fang, Chieh-Hsuan Wang, Hwey-Yun Yau, Chien‐Ping Chung, Yen‐Hsien Lee
ABSTRACT When weak governance practices cause poor bank lending performance, banks are more likely to engage in ‘loan herding’ to avoid a sustained performance deterioration. Using the three main types of Chinese banks as our sample, this study first confirms the existence of loan herding and the positive effects of a weak board structure on poor lending performance (i.e. underperformance). Then, after finding positive impacts of this underperformance on loan herding, we examine whether board structure variables negatively affect loan herding. We find that higher director compensation, a moderate average age of directors, and higher director education levels significantly reduce bank loan herding, whereas board duality and the presence of very old directors significantly increase bank loan herding. Finally, we study the mediation effect of loan performance on the relationship between board structure and loan herding. Our results show that board governance quality affects loan performance, which, in turn, affects loan herding.
{"title":"The impact of board structure on bank loan herding via mediation of underperformance","authors":"Hao Fang, Chieh-Hsuan Wang, Hwey-Yun Yau, Chien‐Ping Chung, Yen‐Hsien Lee","doi":"10.1080/16081625.2022.2067883","DOIUrl":"https://doi.org/10.1080/16081625.2022.2067883","url":null,"abstract":"ABSTRACT When weak governance practices cause poor bank lending performance, banks are more likely to engage in ‘loan herding’ to avoid a sustained performance deterioration. Using the three main types of Chinese banks as our sample, this study first confirms the existence of loan herding and the positive effects of a weak board structure on poor lending performance (i.e. underperformance). Then, after finding positive impacts of this underperformance on loan herding, we examine whether board structure variables negatively affect loan herding. We find that higher director compensation, a moderate average age of directors, and higher director education levels significantly reduce bank loan herding, whereas board duality and the presence of very old directors significantly increase bank loan herding. Finally, we study the mediation effect of loan performance on the relationship between board structure and loan herding. Our results show that board governance quality affects loan performance, which, in turn, affects loan herding.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"110 1","pages":"1494 - 1517"},"PeriodicalIF":1.1,"publicationDate":"2022-04-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91297988","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-19DOI: 10.1080/16081625.2022.2067200
Zhiyong Niu, Xiaoyan Zhou
ABSTRACT In response to the growing interest in corporate environmental sustainability practices, this study examines the impact on corporate environmental investment (EI) of the political uncertainty caused by the turnover in government officials. Based on a large sample of 13,321 Chinese listed firms during the period 2000–2017, the study reveals that political uncertainty causes firms to reduce their environmental investment. In examining the moderating influences of political connection and the institutional environment on such a response, we find that the negative relationship between political uncertainty and environmental investment is strengthened when firms have strong political connection, but is weakened in a more developed institutional environment. The results of the study are robust to a variety of sensitivity tests. We also investigate the importance of industry differences in terms of the role of political uncertainty, but find this to be insignificant across different firm ownership and regional location types. The findings of this study extend the current understanding of how and why the sustainable behavior of enterprises varies depending on the effect of political factors, particularly in the Chinese context, and offer important implications for enterprises in their quest to achieve sustainable development.
{"title":"Political uncertainty and corporate sustainability: how does official turnover affect environmental investment","authors":"Zhiyong Niu, Xiaoyan Zhou","doi":"10.1080/16081625.2022.2067200","DOIUrl":"https://doi.org/10.1080/16081625.2022.2067200","url":null,"abstract":"ABSTRACT In response to the growing interest in corporate environmental sustainability practices, this study examines the impact on corporate environmental investment (EI) of the political uncertainty caused by the turnover in government officials. Based on a large sample of 13,321 Chinese listed firms during the period 2000–2017, the study reveals that political uncertainty causes firms to reduce their environmental investment. In examining the moderating influences of political connection and the institutional environment on such a response, we find that the negative relationship between political uncertainty and environmental investment is strengthened when firms have strong political connection, but is weakened in a more developed institutional environment. The results of the study are robust to a variety of sensitivity tests. We also investigate the importance of industry differences in terms of the role of political uncertainty, but find this to be insignificant across different firm ownership and regional location types. The findings of this study extend the current understanding of how and why the sustainable behavior of enterprises varies depending on the effect of political factors, particularly in the Chinese context, and offer important implications for enterprises in their quest to achieve sustainable development.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"376 1","pages":"1184 - 1203"},"PeriodicalIF":1.1,"publicationDate":"2022-04-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85476216","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-19DOI: 10.1080/16081625.2022.2067197
Sheng Yao, Zhipeng Zhang, Chen-Miao Lin
ABSTRACT We investigate the relation between gross domestic product (GDP) manipulation at the government level and the quality of firms’ environmental information disclosures. Using a sample of Chinese firms, we find that firms in the cities where GDP is manipulated by local leaders are more likely to disclose environmental information by using soft and unverifiable information. We also find that the results are stronger for state-owned companies, for high-polluting firms, and for firms with low-quality internal control. We further find that GDP manipulation is negatively associated with the level of trust in local government, which could potentially explain the relation between GDP manipulation and soft disclosures. This is the first study to investigate the influence of local politicians, who have incentives to inflate GDP growth, on a firm’s disclosure quality.
{"title":"GDP manipulation and environmental information disclosure: evidence from China","authors":"Sheng Yao, Zhipeng Zhang, Chen-Miao Lin","doi":"10.1080/16081625.2022.2067197","DOIUrl":"https://doi.org/10.1080/16081625.2022.2067197","url":null,"abstract":"ABSTRACT We investigate the relation between gross domestic product (GDP) manipulation at the government level and the quality of firms’ environmental information disclosures. Using a sample of Chinese firms, we find that firms in the cities where GDP is manipulated by local leaders are more likely to disclose environmental information by using soft and unverifiable information. We also find that the results are stronger for state-owned companies, for high-polluting firms, and for firms with low-quality internal control. We further find that GDP manipulation is negatively associated with the level of trust in local government, which could potentially explain the relation between GDP manipulation and soft disclosures. This is the first study to investigate the influence of local politicians, who have incentives to inflate GDP growth, on a firm’s disclosure quality.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"24 1","pages":"1165 - 1183"},"PeriodicalIF":1.1,"publicationDate":"2022-04-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81920331","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-30DOI: 10.1080/16081625.2022.2054435
Chunchou Wu, Wen Xu
ABSTRACT This study mainly focuses on utilizing the range-based CARR and CARRX models to explore the non-trading effects during the lunch break and overnight periods in volatility changes forecasting for the two stock markets in China. We find that the price difference in absolute values between the close price in day t-1 and the open price in day t are able to predict the volatility change in the morning trading session significantly. The price range during the lunch break and the trading volume change percentage in the morning session appear positive correlation with the volatility in the afternoon trading session.
{"title":"Volatility forecasting using intraday information with the CARR models for the China stock markets","authors":"Chunchou Wu, Wen Xu","doi":"10.1080/16081625.2022.2054435","DOIUrl":"https://doi.org/10.1080/16081625.2022.2054435","url":null,"abstract":"ABSTRACT This study mainly focuses on utilizing the range-based CARR and CARRX models to explore the non-trading effects during the lunch break and overnight periods in volatility changes forecasting for the two stock markets in China. We find that the price difference in absolute values between the close price in day t-1 and the open price in day t are able to predict the volatility change in the morning trading session significantly. The price range during the lunch break and the trading volume change percentage in the morning session appear positive correlation with the volatility in the afternoon trading session.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"89 1","pages":"912 - 929"},"PeriodicalIF":1.1,"publicationDate":"2022-03-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85954615","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-29DOI: 10.1080/16081625.2022.2054833
Yasuhiko Nakamura
ABSTRACT This study focuses on the endogenous choice between price and quantity contracts in a duopoly composed of asymmetric firms that care about corporate social responsibility (CSR) with managerial delegation. We find that the optimal strategy of a firm that cares about social welfare does not depend on both the degree of homogeneity of goods and the degrees of importance of CSR, while the that of one that cares about consumer surplus strictly depends on the degree on importance of CSR within its rival firm.
{"title":"Corporate social responsibility and endogenous competition structure in an industry composed of asymmetric firms with managerial delegation","authors":"Yasuhiko Nakamura","doi":"10.1080/16081625.2022.2054833","DOIUrl":"https://doi.org/10.1080/16081625.2022.2054833","url":null,"abstract":"ABSTRACT This study focuses on the endogenous choice between price and quantity contracts in a duopoly composed of asymmetric firms that care about corporate social responsibility (CSR) with managerial delegation. We find that the optimal strategy of a firm that cares about social welfare does not depend on both the degree of homogeneity of goods and the degrees of importance of CSR, while the that of one that cares about consumer surplus strictly depends on the degree on importance of CSR within its rival firm.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"29 1","pages":"971 - 985"},"PeriodicalIF":1.1,"publicationDate":"2022-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82695368","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-24DOI: 10.1080/16081625.2022.2054831
Xi Zhao, Teng Niu
ABSTRACT This study investigates the relation between economic policy uncertainty (EPU) and cash holdings in China. We find that EPU is positively related to cash holdings. Based on the mediation analysis, our results suggest that capital expenditures represent an important mechanism by which EPU affects cash holdings. However, there are two different theories to explain the mechanism of capital expenditures. Our results are consistent with the precautionary theory, but not with the real options theory. That is, reducing capital expenditures in the presence of higher EPU means weakening investment demands that, in turn, lead to fewer precautionary cash holdings.
{"title":"Economic policy uncertainty and corporate cash holdings: the mechanism of capital expenditures","authors":"Xi Zhao, Teng Niu","doi":"10.1080/16081625.2022.2054831","DOIUrl":"https://doi.org/10.1080/16081625.2022.2054831","url":null,"abstract":"ABSTRACT This study investigates the relation between economic policy uncertainty (EPU) and cash holdings in China. We find that EPU is positively related to cash holdings. Based on the mediation analysis, our results suggest that capital expenditures represent an important mechanism by which EPU affects cash holdings. However, there are two different theories to explain the mechanism of capital expenditures. Our results are consistent with the precautionary theory, but not with the real options theory. That is, reducing capital expenditures in the presence of higher EPU means weakening investment demands that, in turn, lead to fewer precautionary cash holdings.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"7 1","pages":"930 - 950"},"PeriodicalIF":1.1,"publicationDate":"2022-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81885855","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-20DOI: 10.1080/16081625.2022.2054832
Cheng-xuan Geng, Ke Xu, Xiaoshu Wei
ABSTRACT Based on a comprehensive consideration of financing ecological factors, this study constructs a financing ecosystem and capital allocation efficiency model to simulate the driving factors of capital allocation efficiency in the artificial intelligence (AI) industry. Our findings show that the capital allocation efficiency of the AI industry is expected to gradually decrease. Among the various components of the financing ecosystem, capital allocation efficiency is most sensitive to human capital quality, followed by the development of banking, marketisation level, degree of government intervention, and opening-up level. Finally, suggestions for optimising the financing ecosystem and improving capital allocation efficiency are presented.
{"title":"Driving factors of capital allocation efficiency in the artificial intelligence industry in China– the perspective of a financing ecosystem","authors":"Cheng-xuan Geng, Ke Xu, Xiaoshu Wei","doi":"10.1080/16081625.2022.2054832","DOIUrl":"https://doi.org/10.1080/16081625.2022.2054832","url":null,"abstract":"ABSTRACT Based on a comprehensive consideration of financing ecological factors, this study constructs a financing ecosystem and capital allocation efficiency model to simulate the driving factors of capital allocation efficiency in the artificial intelligence (AI) industry. Our findings show that the capital allocation efficiency of the AI industry is expected to gradually decrease. Among the various components of the financing ecosystem, capital allocation efficiency is most sensitive to human capital quality, followed by the development of banking, marketisation level, degree of government intervention, and opening-up level. Finally, suggestions for optimising the financing ecosystem and improving capital allocation efficiency are presented.","PeriodicalId":45890,"journal":{"name":"Asia-Pacific Journal of Accounting & Economics","volume":"1 1","pages":"1246 - 1263"},"PeriodicalIF":1.1,"publicationDate":"2022-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90405209","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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