Stock pledges by controlling shareholders and the disclosure of critical audit matters: evidence from China

Whereas most U.S. corporations are widely held, the predominant form of ownership in East Asia is control by a family, which often supplies a top manager. These features of “crony capitalism” are actually more pronounced in Western Europe. In both regions, the salient agency problem is expropriation of outside shareholders by controlling shareholders. Dividends provide evidence on this. Group-affiliated corporations in Europe pay higher dividends than in Asia, dampening insider expropriation. Dividend rates are higher in Europe, but lower in Asia, when there are multiple large shareholders, suggesting that they dampen expropriation in Europe, but exacerbate it in Asia. (JEL G34, G35)

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Controlling shareholders' stock pledges and strategic change: the moderating effects of corporate governance

Baltic Journal of Management ◽

10.1108/bjm-08-2020-0274 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Xi Zhong ◽

He Wan ◽

Qiuping Peng

Keyword(s):

Fixed Effects ◽

Family Firms ◽

Strategic Change ◽

Balance Of Power ◽

Controlling Shareholder ◽

Analyst Coverage ◽

Content Type ◽

Controlling Shareholders ◽

Change Behavior ◽

Negative Effect

PurposeThe authors analyze the effects of controlling shareholders' stock pledging on firms' strategic change behavior, and investigate how the balance of power between shareholders and analyst coverage moderates those effects.Design/methodology/approachEmploying fixed effects models, the authors test hypotheses based on Chinese listed company data from 2011 to 2017.FindingsControlling shareholders' stock pledges has a negative effect on strategic change. As the balance of power among shareholders and/or analyst coverage increases, it mitigates the effect of controlling shareholder stock pledges on strategic change. In particular, the balance of power between shareholders and analyst coverage weakened the relationship between controlling shareholder stock pledges and strategic change. Lastly, after distinguishing family from nonfamily firms, the authors discovered that these findings only held for family firms.Originality/valueThis study makes important contributions to strategic change, stock pledge and family firm literature, and also provides guidance on firms' strategic change practices.

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ANALISIS PENGARUH TATA KELOLA PERUSAHAAN YANG BAIK TERHADAP RASIO PEMBAYARAN DIVIDEN

Jurnal Riset Akuntansi dan Keuangan ◽

10.21460/jrak.2007.31.129 ◽

2007 ◽

Vol 3 (1) ◽

pp. 1

Author(s):

Eko Budi Santoso

Keyword(s):

Corporate Governance ◽

Investor Protection ◽

Dividend Payout ◽

Controlling Shareholders ◽

Concentrated Ownership ◽

Good Corporate Governance ◽

Crucial Problem

Investor protection in highty concentrated ownership as in Indonesia is a crucial problem. Expropriation tends to be high in lower investor protection because controlling shareholders can implement policies that benefit themselves at the expense of outside investors. In a high expropriation, outside investors will choose dividends rather than retained earnings.This paper examines good corporate governance as a solution.for a good investor protection in Indonesia. Using a sample of 245 firms for observdion period of 2001-200j, the results slows that stronger investor ptotection related with lower dividend payout ratio.Kqtwords : Good Corporate Governance, Dividend Payout Ratio,Investor Protection, Concentrated Ownership.

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