Pub Date : 2025-09-01DOI: 10.1016/j.bar.2025.101612
Dongna Zhang , Xingyu Dai , Qunwei Wang
We examine the out-of-sample performance of adding green assets to a stock-bond-commodity benchmark portfolio as EU investors across seven investment horizons. By employing eight portfolio optimization techniques, we find that incorporating green assets leads to statistically significant improvement in the Sharpe ratio across different investment horizons and risk preferences. The Sharpe ratio, Sortino ratio, and return-loss demonstrate improvement as investment horizon lengthens. Over the long-run horizon, green assets are more beneficial for risk-tolerant investors compared to risk-averse investors. The Data Envelopment Analysis confirms that green assets contribute to a more pronounced improvement in efficiency for risk-tolerant investors. The results remain robust with alternative dataset and transaction cost setting. Our findings offer implications for investors and policymakers to promote green finance.
{"title":"Do green assets enhance portfolio optimization? A multi-horizon investing perspective","authors":"Dongna Zhang , Xingyu Dai , Qunwei Wang","doi":"10.1016/j.bar.2025.101612","DOIUrl":"10.1016/j.bar.2025.101612","url":null,"abstract":"<div><div><span>We examine the out-of-sample performance of adding green assets to a stock-bond-commodity benchmark portfolio as EU investors across seven investment horizons. By employing eight portfolio optimization techniques, we find that incorporating green assets leads to statistically significant improvement in the Sharpe ratio across different investment horizons and risk preferences. The Sharpe ratio, Sortino ratio, and return-loss demonstrate improvement as investment horizon lengthens. Over the long-run horizon, green assets are more beneficial for risk-tolerant investors compared to risk-averse investors. The </span>Data Envelopment Analysis<span> confirms that green assets contribute to a more pronounced improvement in efficiency for risk-tolerant investors. The results remain robust with alternative dataset and transaction cost setting. Our findings offer implications for investors and policymakers to promote green finance.</span></div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"57 5","pages":"Article 101612"},"PeriodicalIF":9.4,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143570494","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-01DOI: 10.1016/j.bar.2023.101282
Gary Tian , Kun Tracy Wang , Yue Wu
Despite the key role played by banks in shifting the global economy toward sustainable development, little is known about how the integration of environmental considerations into their lending decisions affects their market valuation. Using a sample of announcements of bank loans issued by Chinese listed banks and an event study methodology, this study examines how the market values the green credit performance of banks. We find that banks with superior green credit performance have significantly higher market valuation upon loan announcements. Cross-sectional analyses show that the positive effect of banks' green credit performance is more pronounced when banks are less exposed to political pressures. This positive effect is also stronger when borrowers have strong environmental and social (ES) performance, provide ES disclosures, operate in industries that are not heavily polluting, have high institutional ownership, and are controlled by private shareholders. Finally, our path analysis shows that green credit increases banks' market valuation by improving the prospect of future cash flows and reducing credit risk for banks. Overall, we document that green credit is a value-enhancing practice for banks in emerging markets such as China, where legal institutions and environmental regulations may not be as developed as in more advanced markets.
{"title":"Does the market value the green credit performance of banks? Evidence from bank loan announcements","authors":"Gary Tian , Kun Tracy Wang , Yue Wu","doi":"10.1016/j.bar.2023.101282","DOIUrl":"10.1016/j.bar.2023.101282","url":null,"abstract":"<div><div>Despite the key role played by banks in <u>shifting</u> the global economy <u>toward</u><span> sustainable development, little is known about how the integration of environmental considerations into their lending decisions affects their market valuation. Using a sample of announcements of bank loans issued by Chinese listed banks and an event study<span> methodology, this study examines how the market values the green credit performance of banks. We find that banks with superior green credit performance have significantly higher market valuation upon loan announcements. Cross-sectional analyses show that the positive effect of banks' green credit performance is more pronounced when banks are less exposed to political pressures. This positive effect is also stronger when borrowers have strong environmental and social (ES) performance, provide ES disclosures, operate in industries<span> that are not heavily polluting, have high institutional ownership, and are controlled by private shareholders. Finally, our path analysis shows that green credit increases banks' market valuation by improving the prospect of future cash flows and reducing credit risk for banks. Overall, we document that green credit is a value-enhancing practice for banks in emerging markets such as China, where legal institutions and environmental regulations may not be as developed as in more advanced markets.</span></span></span></div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"57 5","pages":"Article 101282"},"PeriodicalIF":9.4,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139294115","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-01DOI: 10.1016/j.bar.2024.101517
Guoliu Hu , Xiaoqian Li , Zhangfan Cao
This study investigates the impact of tax incentives in the form of accelerated depreciation on corporate environmentally sustainable practices that facilitate the transition towards a low-carbon economy. Using a difference-in-differences estimation that exploits the staggered adoptions of the accelerated depreciation policy for fixed assets in China as a quasi-natural experiment, we investigate the influence of tax incentives on firms' carbon emissions. Our results show that the accelerated depreciation policy significantly reduces carbon emissions of firms operating in industries that adopt the policy relative to the remaining ones. Our study further suggests that the accelerated depreciation policy reduces firms' carbon emissions primarily through investment in abatement facilities, innovation, and productivity. Moreover, we find that the effect of the accelerated depreciation policy on carbon emissions is stronger for firms that are more socially responsible and capital intensive and firms in areas with a higher environmental regulation or a lower economic pressure. Overall, our study highlights the tax incentives as an unintended but paramount means to promote firms’ environmental governance.
{"title":"Do tax incentives make firms greener? Evidence from the accelerated depreciation policy in China","authors":"Guoliu Hu , Xiaoqian Li , Zhangfan Cao","doi":"10.1016/j.bar.2024.101517","DOIUrl":"10.1016/j.bar.2024.101517","url":null,"abstract":"<div><div>This study investigates the impact of tax incentives in the form of accelerated depreciation on corporate environmentally sustainable practices that facilitate the transition towards a low-carbon economy. Using a difference-in-differences estimation that exploits the staggered adoptions of the accelerated depreciation policy for fixed assets in China as a quasi-natural experiment, we investigate the influence of tax incentives on firms' carbon emissions<span>. Our results show that the accelerated depreciation policy significantly reduces carbon emissions of firms operating in industries that adopt the policy relative to the remaining ones. Our study further suggests that the accelerated depreciation policy reduces firms' carbon emissions primarily through investment in abatement facilities, innovation, and productivity. Moreover, we find that the effect of the accelerated depreciation policy on carbon emissions is stronger for firms that are more socially responsible and capital intensive and firms in areas with a higher environmental regulation or a lower economic pressure. Overall, our study highlights the tax incentives as an unintended but paramount means to promote firms’ environmental governance.</span></div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"57 5","pages":"Article 101517"},"PeriodicalIF":9.4,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145247984","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-01DOI: 10.1016/j.bar.2024.101324
Bao Wu , Feng Chen , Lanhua Li , Lei Xu , Zijia Liu , Yaoyao Wu
This paper investigates the heterogeneous responses to institutional investor ESG activism by expanding reference point theory among non-family firms and family firms with different intergenerational contexts. Using a Chinese family firm database comprising 14,425 observations from 2012 to 2020, this study finds that institutional investor ESG activism is more likely to stimulate exploratory green innovation in family firms than in non-family firms. Such linkage between institutional investor ESG activism and exploratory green innovation is stronger in second-generation family firms than in first-generation firms. Furthermore, this study explores the moderating roles of family involvement and financial slack in first- and second-generation family firms as they respond to institutional investor ESG activism. Specifically, both family involvement and financial slack can enhance the positive impact of institutional investor ESG activism on exploratory green innovation in the context of second-generation family firms. The moderating effect of family involvement is not significant, whereas the moderating effect of financial slack turns into be negative in the context of first-generation family firms. Our study highlights the heterogeneous responses to institutional investor ESG activism of family firms with different intergenerational contexts.
{"title":"Institutional investor ESG activism and exploratory green innovation: Unpacking the heterogeneous responses of family firms across intergenerational contexts","authors":"Bao Wu , Feng Chen , Lanhua Li , Lei Xu , Zijia Liu , Yaoyao Wu","doi":"10.1016/j.bar.2024.101324","DOIUrl":"10.1016/j.bar.2024.101324","url":null,"abstract":"<div><div><span>This paper investigates the heterogeneous responses to institutional investor ESG<span> activism by expanding reference point theory among non-family firms and family firms with different intergenerational contexts. Using a Chinese family firm database comprising 14,425 observations from 2012 to 2020, this study finds that institutional investor ESG activism is more likely to stimulate exploratory </span></span>green innovation<span> in family firms than in non-family firms. Such linkage between institutional investor ESG activism and exploratory green innovation is stronger in second-generation family firms than in first-generation firms. Furthermore, this study explores the moderating roles of family involvement and financial slack in first- and second-generation family firms as they respond to institutional investor ESG activism. Specifically, both family involvement and financial slack can enhance the positive impact of institutional investor ESG activism on exploratory green innovation in the context of second-generation family firms. The moderating effect of family involvement is not significant, whereas the moderating effect of financial slack turns into be negative in the context of first-generation family firms. Our study highlights the heterogeneous responses to institutional investor ESG activism of family firms with different intergenerational contexts.</span></div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"57 4","pages":"Article 101324"},"PeriodicalIF":5.5,"publicationDate":"2025-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139637793","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-01DOI: 10.1016/j.bar.2024.101468
Xuan He , Yingyu Zhang
Political connections play a key role in family firms receiving government subsidies. However, previous research has not focused on the duality of the political connections between the ruling party and the government. Based on the joint terms of the party and government leaders, which constitutes a new perspective, we analyze how family firms address this duality as they seek stable and continuous subsidies. We test our theory in the context of Chinese listed family firms and local leadership databases between 2007 and 2019. In this empirical study, we demonstrate that longer joint terms for ruling parties and government leaders enhance the stability of family firms’ political connections and benefit enterprises that are more likely to receive continual government subsidies. This effect significantly weakens in regions in which marketization is more advanced because resource allocation gradually shifts from government mandates to the market. Therefore, family firms in such regions must adapt by seeking a stable developmental environment in the midst of dynamic institutional change. In our study, we expand the literature on political connections and the corporate political activity (CPA) of family firms in emerging markets.
{"title":"Keep a watchful eye on both: The impact of the joint terms of ruling party and government leaders on family firm government subsidies","authors":"Xuan He , Yingyu Zhang","doi":"10.1016/j.bar.2024.101468","DOIUrl":"10.1016/j.bar.2024.101468","url":null,"abstract":"<div><div>Political connections play a key role in family firms receiving government subsidies. However, previous research has not focused on the duality of the political connections between the ruling party and the government. Based on the joint terms of the party and government leaders, which constitutes a new perspective, we analyze how family firms address this duality as they seek stable and continuous subsidies. We test our theory in the context of Chinese listed family firms and local leadership databases between 2007 and 2019. In this empirical study, we demonstrate that longer joint terms for ruling parties and government leaders enhance the stability of family firms’ political connections and benefit enterprises that are more likely to receive continual government subsidies. This effect significantly weakens in regions in which marketization is more advanced because resource allocation gradually shifts from government mandates to the market. Therefore, family firms in such regions must adapt by seeking a stable developmental environment in the midst of dynamic institutional change. In our study, we expand the literature on political connections and the corporate political activity (CPA) of family firms in emerging markets.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"57 4","pages":"Article 101468"},"PeriodicalIF":5.5,"publicationDate":"2025-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144680477","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-01DOI: 10.1016/j.bar.2024.101493
Shahadat Hossain , Md Mosharraf Hossain , Vincent K. Chong
This study investigates the influence of client protection principles (CPPs) in lending practice on the economic and social performance of Microfinance Institutions (MFIs). The demand for ethical and fair treatment of microfinance borrowers has increased in recent years after several incidences of exploiting clients in different parts of the world. In response to this call, many MFIs adopted CPPs in lending operations to borrowers. However, there is a debate about whether adopting CPPs enhances the economic and social performance of MFIs. We empirically test this using a unique panel dataset of 1015 MFIs (5650 MFI-year observations) operating in 93 countries from 2007 to 2018. We find a positive impact of client protection on social performance in the short- and long-run. The impact of client protection on financial performance is negative in the short run, but the effect diminishes in the long run. Our documented findings are robust across a battery of robustness tests and account for endogeneity using propensity score matching, two-stage least squares estimation, and a two-step system generalized method of moments. Detailed analyses show that not all the client protection principles have a significant impact on MFI performance. Additional analyses show that the influence of CPPs on social performance is more pronounced in larger than smaller MFIs. Also, adopting CPPs increases the clients' access to savings and the MFIs’ access to subsidized funds.
{"title":"Do client protection principles matter for the economic and social performance of microfinance institutions?","authors":"Shahadat Hossain , Md Mosharraf Hossain , Vincent K. Chong","doi":"10.1016/j.bar.2024.101493","DOIUrl":"10.1016/j.bar.2024.101493","url":null,"abstract":"<div><div>This study investigates the influence of client protection principles (CPPs) in lending practice on the economic and social performance of Microfinance Institutions (MFIs). The demand for ethical and fair treatment of microfinance borrowers has increased in recent years after several incidences of exploiting clients in different parts of the world. In response to this call, many MFIs adopted CPPs in lending operations to borrowers. However, there is a debate about whether adopting CPPs enhances the economic and social performance of MFIs. We empirically test this using a unique panel dataset of 1015 MFIs (5650 MFI-year observations) operating in 93 countries from 2007 to 2018. We find a positive impact of client protection on social performance in the short- and long-run. The impact of client protection on financial performance is negative in the short run, but the effect diminishes in the long run. Our documented findings are robust across a battery of robustness tests and account for endogeneity using propensity score matching, two-stage least squares estimation, and a two-step system generalized method of moments. Detailed analyses show that not all the client protection principles have a significant impact on MFI performance. Additional analyses show that the influence of CPPs on social performance is more pronounced in larger than smaller MFIs. Also, adopting CPPs increases the clients' access to savings and the MFIs’ access to subsidized funds.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"57 4","pages":"Article 101493"},"PeriodicalIF":5.5,"publicationDate":"2025-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144680476","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-01DOI: 10.1016/j.bar.2024.101464
Xianzhe Jin , Jialong Li , Yefeng Wang , Yuan Wang
This research examines the intricate relationship between trade and bank credit, with a specific focus on family and nonfamily small and medium-sized enterprises (SMEs). Our analysis of a sample of 3690 US SMEs reveals a distinctive pattern: Trade credit and bank credit act as substitutes for each other for family firms, but they serve as complements to each other for nonfamily firms. Furthermore, our findings highlight that this distinctive pattern is particularly pronounced in the contexts of low-performing SMEs and smaller SMEs. The results provide a nuanced understanding of the relationship between trade and bank credit and underscore the importance of considering the impact of a governance structure on an SME's financing behaviors.
{"title":"Substitutes or complements? Use of trade credit and bank credit by family SMEs","authors":"Xianzhe Jin , Jialong Li , Yefeng Wang , Yuan Wang","doi":"10.1016/j.bar.2024.101464","DOIUrl":"10.1016/j.bar.2024.101464","url":null,"abstract":"<div><div>This research examines the intricate relationship between trade and bank credit, with a specific focus on family and nonfamily small and medium-sized enterprises (SMEs). Our analysis of a sample of 3690 US SMEs reveals a distinctive pattern: Trade credit and bank credit act as substitutes for each other for family firms, but they serve as complements to each other for nonfamily firms. Furthermore, our findings highlight that this distinctive pattern is particularly pronounced in the contexts of low-performing SMEs and smaller SMEs. The results provide a nuanced understanding of the relationship between trade and bank credit and underscore the importance of considering the impact of a governance structure on an SME's financing behaviors.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"57 4","pages":"Article 101464"},"PeriodicalIF":5.5,"publicationDate":"2025-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142045855","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-01DOI: 10.1016/j.bar.2024.101356
Naina Duggal , Lerong He , Tara Shankar Shaw
This paper examines how corporate compliance with the mandatory corporate social responsibility (CSR) spending regulation affects its cost of debt and how this effect varies with family control and ownership. Utilizing a longitudinal sample of Indian listed firms, we document that compliance with the CSR spending regulation leads to a lower cost of debt, and this relationship is more salient in non-family firms than in family firms. Moreover, the attenuation effect of family firms is stronger in firms both controlled and managed by families, with larger family ownership or managed by non-founder CEOs. We also find that the efficacy of compliance in reducing the cost of borrowing is stronger in firms engaged in CSR activities before the regulatory mandate. Our results are robust to endogeneity tests, different estimation methods, and alternative measures. Overall, we demonstrate that CSR compliance conveys valuable information on firm characteristics through both signaling and screening channels, consequently affecting debtholders' evaluation of firm risk and shaping their lending decisions. However, debtholders' assessments and decisions vary with firms’ ownership and control structure.
{"title":"Mandatory corporate social responsibility spending, family control, and the cost of debt","authors":"Naina Duggal , Lerong He , Tara Shankar Shaw","doi":"10.1016/j.bar.2024.101356","DOIUrl":"10.1016/j.bar.2024.101356","url":null,"abstract":"<div><div>This paper examines how corporate compliance with the mandatory corporate social responsibility (CSR) spending regulation affects its cost of debt and how this effect varies with family control and ownership. Utilizing a longitudinal sample of Indian listed firms, we document that compliance with the CSR spending regulation leads to a lower cost of debt, and this relationship is more salient in non-family firms than in family firms. Moreover, the attenuation effect of family firms is stronger in firms both controlled and managed by families, with larger family ownership or managed by non-founder CEOs. We also find that the efficacy of compliance in reducing the cost of borrowing is stronger in firms engaged in CSR activities before the regulatory mandate. Our results are robust to endogeneity tests, different estimation methods, and alternative measures. Overall, we demonstrate that CSR compliance conveys valuable information on firm characteristics through both signaling and screening channels, consequently affecting debtholders' evaluation of firm risk and shaping their lending decisions. However, debtholders' assessments and decisions vary with firms’ ownership and control structure.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"57 4","pages":"Article 101356"},"PeriodicalIF":5.5,"publicationDate":"2025-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139695958","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-01DOI: 10.1016/j.bar.2025.101644
James J. Chrisman , Hanging “Chevy” Fang , Craig Wilson , Zhenyu Wu
Entrepreneurship is an engine of economic growth and development in societies around the world. There are many accounting and finance issues faced by entrepreneurial firms related to financing, ownership structure, and corporate governance. Likewise, a growing body of literature in accounting and finance that highlights the importance of entrepreneurship has emerged in recent years. In this special issue, we use an intersectional approach to research in these areas in order to explore seemingly disparate fields and investigate points of connection, as well as divergence. This special issue includes seven articles organized into three categories representing financing, innovation, and corporate governance. Our aim is to improve the understanding of the relations between accounting, finance, and entrepreneurship from both business and social perspectives.
{"title":"Bridging accounting and finance with entrepreneurship: Business and social perspectives","authors":"James J. Chrisman , Hanging “Chevy” Fang , Craig Wilson , Zhenyu Wu","doi":"10.1016/j.bar.2025.101644","DOIUrl":"10.1016/j.bar.2025.101644","url":null,"abstract":"<div><div>Entrepreneurship is an engine of economic growth and development in societies around the world. There are many accounting and finance issues faced by entrepreneurial firms related to financing, ownership structure, and corporate governance. Likewise, a growing body of literature in accounting and finance that highlights the importance of entrepreneurship has emerged in recent years. In this special issue, we use an intersectional approach to research in these areas in order to explore seemingly disparate fields and investigate points of connection, as well as divergence. This special issue includes seven articles organized into three categories representing financing, innovation, and corporate governance. Our aim is to improve the understanding of the relations between accounting, finance, and entrepreneurship from both business and social perspectives.</div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"57 4","pages":"Article 101644"},"PeriodicalIF":5.5,"publicationDate":"2025-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143849594","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-07-01DOI: 10.1016/j.bar.2024.101323
Bin Liu , David Ahlstrom , Yutong Zhang
While agency theory has long informed both research and practice in emphasizing good corporate governance in preventing financial misconduct, monitoring bodies do not always function so well, especially in transition economies. By integrating the stakeholder-agency perspective with prospect theory, this study provides a new explanation of such dysfunction by introducing an embedded agent concept that manifests a “schizophrenic” status of agents which creates a need to satisfy multiple stakeholders and their conflicting interests. Drawing on a sample of small-to-medium-sized enterprises (SMEs) listed on the Chinese National Equities and Exchange and Quotations system from 2014 to 2017, it is shown that having a board secretary did not help reduce financial misconduct as the government had hoped, because of an embedded agent problem. However, their dysfunctional status would largely disappear, and they would perform their monitoring responsibilities if given higher equity shares and stricter subnational regulations -- two key contingencies that better align embedded agents’ interests with one group of stakeholders. Overall, this study contributes to the corporate governance literature by introducing the embedded agent concept and its theoretical boundaries, along with a focus on transition economies.
{"title":"The schizophrenic board secretary: An embedded agent between multiple stakeholders and financial misconduct","authors":"Bin Liu , David Ahlstrom , Yutong Zhang","doi":"10.1016/j.bar.2024.101323","DOIUrl":"10.1016/j.bar.2024.101323","url":null,"abstract":"<div><div><span>While agency theory has long informed both research and practice in emphasizing good corporate governance in preventing financial misconduct, monitoring bodies do not always function so well, especially </span>in transition economies<span>. By integrating the stakeholder-agency perspective with prospect theory, this study provides a new explanation of such dysfunction by introducing an embedded agent concept that manifests a “schizophrenic” status of agents which creates a need to satisfy multiple stakeholders and their conflicting interests. Drawing on a sample of small-to-medium-sized enterprises (SMEs) listed on the Chinese National Equities and Exchange and Quotations system from 2014 to 2017, it is shown that having a board secretary did not help reduce financial misconduct as the government had hoped, because of an embedded agent problem. However, their dysfunctional status would largely disappear, and they would perform their monitoring responsibilities if given higher equity shares and stricter subnational regulations -- two key contingencies that better align embedded agents’ interests with one group of stakeholders. Overall, this study contributes to the corporate governance literature by introducing the embedded agent concept and its theoretical boundaries, along with a focus on transition economies.</span></div></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"57 4","pages":"Article 101323"},"PeriodicalIF":5.5,"publicationDate":"2025-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139420151","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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