This paper investigates the effects of largest-shareholder ownership concentration, foreign ownership, and audit quality on the amount of firm-specific information incorporated into share prices, as ...measured by stock price synchronicity, of Chinese-listed firms over the 1996–2003 period. We show that synchronicity is a concave function of ownership by the largest shareholder with its maximum at an approximate 50% level. Further, we find that synchronicity is higher when the largest shareholder is government related. We also find that foreign ownership and auditor quality are inversely associated with synchronicity. Finally, we show that the amount of earnings information reflected in stock returns is lower for firms with high synchronicity.
Green technology innovation is the principal approach to cleaner production and achieving sustainable development. This paper focuses on the impact of the synergy effect between external government ...subsidies and internal slack on green technology innovation, as well as the moderating role of ownership concentration in this process. Using China’s data of the high-tech enterprises listed in Shanghai and Shenzhen from 2011 to 2016, the hypotheses are tested based on the fixed effect model of negative binomial distribution. The results suggest that: a) the synergy of government subsidies and unabsorbed slack effectively improves the enterprises’ green technical innovation, while the synergy of government subsidies and absorbed slack negatively affect the enterprises’ green technical innovation; and b) ownership concentration positively moderates the relation between green technology innovation and the synergy of government subsidies and unabsorbed slack with a inverted U-shaped curve, while there is no significance in their absorbed slack counterparts. Moreover, the baseline conclusions are applicable to non-state-owned enterprises, while they differ in state-owned enterprises regarding the property heterogeneity: the synergistic effect between government subsidies and absorbed slack has no significance on the green technology innovation of these state-owned enterprises; and the ownership concentration positively moderates the relation between green technology innovation and the synergy of government subsidies and unabsorbed slack with a U-shaped curve. Thus, an integrated framework of public supported resources, internal resources and the ownership concentration is built to optimize the allocation of external and internal resources for enterprises to develop green new technologies and ultimately promote the sustainability of the environment.
This paper focuses on the impact of synergy effect between external government subsidies and internal slack on green technology innovation, as well as the moderating role of ownership concentration in this process. Display omitted
•Systematically integrates external subsidies, internal slack resources, ownership concentration and green technology innovation.•The synergy between subsidies and slack resources on green technology innovation is moderated by ownership concentration.•Both absorbed slack and unabsorbed slack are readily recombined with subsidies to promote green technology innovation.•The relationship among subsidies, slack resources, equity and green technology innovation is heterogeneous in property.
This paper investigates the relationship between controlling shareholders' share pledging and firm level over-investment. Utilizing Chinese A-share market data spanning 2007–2020, we find that firms ...with share pledging by controlling shareholders are more prone to over-invest, and the over-investment degree becomes severer as the pledging percentage increases. In addition, we observe this effect more pronounced in firms characterized by more concentrated ownership structure. Our findings still hold after the endogeneity disposal with a firm-fixed effect regression, Heckman two-stage regression with instrumental variables, the propensity score matching (PSM) and differences-in-differences (DID) approach. Furthermore, we observe that firms with controlling shareholders' share pledging tend to be concerned more with additional investments while neglecting maintenance investments and R&D investments. Combined with the motivation of controlling shareholders to gain substitute cash flow rights and convey good signals to the market, as well as the feasibility by using their dominate voting rights and pledged funds, it properly illustrates the mechanism through which controlling shareholders' share pledging impact over-investment, which meanwhile aggravates the principal-principal (PP) conflicts between controlling shareholders and minority shareholders. Consequently, our findings empirically demonstrate that signaling costs in signaling theory could be explicit conflicts in the agency theory, adding new empirical evidence for the relationship between signaling theory and agency theory.
•Controlling shareholders' share pledging has a positive impact on firm level over-investment.•The impact is more pronounced in the firms characterized by more concentrated ownership;.•The policy in 2018 that restricts the percentage of firms' pledged shares also restricts firms' over-investment.•Firms with share pledging by controlling shareholders invest more in additional investment while less in maintenance investment and R&D investments.•Signaling costs in signaling theory could be explicit conflicts in the agency theory, adding new empirical evidence for the relationship between signaling theory and agency theory.
The impact of the board of directors (BOD) on the performance of companies, particularly considering the moderating role of ownership concentration (OC), is a topic of significant importance in the ...realm of corporate governance (Habtoor, 2020). The study employs structural equation modelling (SEM), a more advanced method, to address causality and endogeneity issues in governance-performance relationships (Hamid & Purbawangsa, 2022). The hypotheses are constructed based on resource dependence and agency theories, enhancing the theoretical framework. The research focuses on Jordanian service and industrial firms listed on the Amman Stock Exchange (ASE) from 2014 to 2018, encompassing 92 firms and 460 observations. Based on the estimated results, the study confirms that the size of the board, CEO duality, and board independence, including OC, all have a positive effect on firm performance. The results also show that the BOD has a statistically significant impact on firm performance when considering the moderating impact of OC. However, the study finds that CEO duality and board independence have an insignificant impact on return on assets (ROA). This study contributes to the literature on BOD and firm performance and provides insights for practitioners and policymakers.
At present, many economies are suffering from environmental problems that have significant effects on the climate and life of human beings, thus, the governments and institutions work to reduce the ...industrial negative effects on the environment. Based on the Porter Hypothesis, agency theory, and management and organization theory, this study examines the connection between environmental regulations, corporate social responsibility and firm innovation with the moderating role of CEO power and ownership concentration. Importantly, this study divided CEOs into male and female CEO. This study classifies firm innovation into two kinds, such as firm input innovation and firm output innovation. This study selects the sample of Pakistani manufacturing firms and uses the panel data for the period 2008 to 2018. For the analysis purpose, this study employs ordinary least squares (OLS), fixed-effect (FE) model, generalized method of moments (GMM). For more robust results, this study employs the feasible generalized least square (FGLS) model. Based on the findings from the empirical analysis, this study concludes that environmental regulations and corporate social responsibility have a positive relationship with firm innovation (Input and Output). Moreover, a powerful CEO and ownership concentration are valuable for firm innovation (Input and Output), because these factors are positively connected with firm innovation (Input and Output). Majorly, this study contends that environmental regulations and corporate social responsibility are positively connected with firm innovation (Input and Output) because of the interactive role of CEO power. This study supported the role of both male and female CEOs for firm innovative practices. Therefore, firms of developing economies should also consider the female CEO. Besides, environmental regulations and corporate social responsibility also positively connected with firm innovation (Input and Output) because of the interactive role of ownership concentration. Moreover, this study offers various policy implications for governments and policymakers.
•This study examines the moderating role of CEO power and ownership concentration in environmental regulations, CSR and firm innovation.•This study uses data of Pakistani firms from 2008 to 2018, and analyze it by employing OLS, fixed-effect (FE) model, GMM model and FGLS models.•This study concludes that environmental regulations and CSR are positively associated with firm innovation.•This study endorses positive connection of environmental regulations, CSR and firm innovation with CEO power and ownership concentration.
In this study, we document that independent corporate boards of Hong Kong firms provide effective monitoring of earnings management, which suggests that despite differences in institutional ...environments, corporate board independence is important to ensure high-quality financial reporting. The findings also show that the monitoring effectiveness of corporate boards is moderated in family-controlled firms, either through ownership concentration or the presence of family members on corporate boards. The results based on firms reporting small earnings increases provide additional support for our finding that the monitoring effectiveness of independent corporate boards is moderated in family-controlled firms.
This paper examines the link between ownership concentration and corporate bond volatility. We show that more concentrated mutual fund ownership is associated with higher volatility of corporate ...bonds. This relation is stronger among more illiquid bonds, during periods of heightened bond market illiquidity, and among bonds held by corporate bond funds that invest in more illiquid bonds and experience higher or more correlated liquidity shocks. Using a sample of mutual fund mergers, we further show that increases in bond volatility are unlikely to be driven entirely by the endogenous ownership structure of corporate bonds. Our findings suggest that the concentrated ownership by corporate bond mutual funds provides another channel, apart from illiquidity, to help explain the excess volatility in corporate bonds.
We investigate how ownership concentration and institutional distance both directly influence the equity-based ownership strategies of a sample of Turkish MNEs, and also how institutional differences ...moderate the link between ownership concentration and the equity-based ownership strategies of these firms. The findings suggest that neither ownership concentration nor institutional distance significantly affects the level of equity ownership. Although institutional distance variables have no direct effects on equity ownership, they tend to moderate the relationships between the ownership concentration and foreign equity ownership strategy of Turkish MNEs. In particular, we provide evidence that the regulative and normative dimensions of institutional distance affect the strength of the relationships between equity ownership strategy of MNEs and ownership concentration more so than the cognitive dimension of institutional distance.
•Analyzes equity ownership from the viewpoint of corporate governance•Investigates foreign market equity ownership decisions of MNEs from an emerging country•Neither ownership concentration nor institutional distance affects equity ownership strategy.•Institutional distance moderates the link between the ownership concentration and equity ownership strategy.•Offers implications for emerging country foreign investors and managers
ESG disclosure and firm performance before and after IR Albitar, Khaldoon; Hussainey, Khaled; Kolade, Nasir ...
International journal of accounting and information management,
07/2020, Volume:
28, Issue:
3
Journal Article
Peer reviewed
Open access
Purpose
This paper aims to investigate the effect of environmental, social and governance disclosure (ESGD) on firm performance (FP) before and after the introduction of integrated reporting (IR) ...further to exploring a potential moderation effect of corporate governance mechanisms on this relationship.
Design/methodology/approach
Ordinary least squares and firm-fixed effects models were estimated based on data related to FTSE 350 between 2009 and 2018. The data has been mainly collected from Bloomberg and Capital IQ. This analysis was supplemented with applying a two-stage least squares (2 SLS) model to address any concerns regarding the expected occurrence of endogeneity problems.
Findings
The results show a positive and significant relationship between ESGD score and FP before and after 2013, among a sample of FTSE 350. Furthermore, the study is suggestive of a moderation effect of corporate governance mechanisms (i.e. ownership concentration, gender diversity and board size) on the ESGD-FP nexus. Additionally, this paper finds that firms voluntarily associated with IR have a tendency to achieve better firm financial performance.
Practical implications
The findings of the present study have several policy and practitioner implications. For example, managers may engage in ESGD to enhance their firms’ financial performance by the voluntary involvement in IR, which believed to help investors to rationalise their investment decisions. Likewise, the results reiterate the crucial need to integrate more social, environmental and economic regulations to promote sustainability in the UK. The paper also offers a systematic picture for policymakers in the UK as well as future researchers.
Social implications
The findings of this paper indicate that IR plays a significant role in the relationship between ESGD and FP, where IR firms seemed to be achieving better FP as compared with their non-IR counterparts. This implies that stakeholders may have played a magnificent effort to encourage firms’ voluntary engagement in IR in the UK.
Originality/value
To the best of the authors’ knowledge, this is the first study to explore the potential moderating effect of ownership concentration, gender diversity and board size on the relationship between ESGD and FP and to examine whether firms’ voluntary involvement in IR can lead to better FP after the introduction of IR in 2013 in the UK.
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