Can outside CEO successors bring innovation to firms? Evidence from China

2020 ◽  
Vol 14 (4) ◽  
pp. 935-956 ◽  
Author(s):  
Xin Liu ◽  
Youzhi Xue
Keyword(s):  
Decision Making ◽  
Poisson Regression ◽  
Cultural Context ◽  
Chief Executive ◽  
Ceo Succession ◽  
Firm Innovation ◽  
Content Type ◽  
Factors Affecting ◽  
Chinese Companies ◽  
Negative Effect

Purpose This paper aims to examine the effect of outside chief executive officer (CEO) succession on firm innovation in Chinese companies and to explore the mechanism behind the process. By analyzing the motivation of CEO successors of different origins in the context of selection, this paper identifies the factors affecting outside CEO successors’ decision-making on post-succession firm innovation. Design/methodology/approach A Poisson regression model is used on a sample of 1,084 firm-year observations taken from Chinese listed companies that endured CEO succession during the period of 2009–2016. Fixed-effect Poisson regression modeling was performed after likelihood ratio and Hausman testing to assess the robustness of the findings. Findings The results show that outside CEO successions are significantly and negatively associated with post-succession firm innovation. Moreover, the authors found a negative effect of outside CEO succession on post-succession firm innovation when the predecessor has a long tenure or the successor is older. Originality/value .This study contributes to the literature on CEO succession, CEO–board relationships and firm innovation by shedding light on how agency, human capital and career-concerning theories in the CEO selection context apply to corporate governance and strategy. Moreover, by exploring the factors influencing CEO successors’ decision-making in terms of firm innovation in the Chinese social and cultural context, this paper identifies ways to promote firm innovation for Chinese companies from the concept of leadership succession.

Labor lawsuits and debt maturity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Omer Unsal
Keyword(s):  
Chief Executive ◽  
Debt Maturity ◽  
Employee Relations ◽  
Short Term ◽  
Content Type ◽  
Negative Effect ◽  
Debt Market ◽  
Legal Fees

Purpose This paper aims to investigate how firms’ relationships with employees define their debt maturity. The authors empirically test the role of employee litigations in influencing firms’ choice of short-term versus long-term debt. The authors study employee relations by analyzing the importance of the workplace environment on capital structure. Design/methodology/approach The author’s test hypotheses using a sample of US publicly traded firms between 2000 and 2017, including 3,056 unique firms with 4,256 unique chief executive officer, adopting the fixed effect panel model. Findings The authors document that employee litigations have a significant negative effect on the use of short-term debt and a significant positive affect on long-term debt. Employee litigations, along with legal fees, outcomes and charging parties, matter the most in explaining debt maturity. In addition, frequently sued firms abandon the short-term debt market and use less shareholders’ equity to finance their operations while relying more on the longer debt market. Originality/value To the best of the authors’ knowledge, this is the first study to examine the role of employee mistreatment in debt maturity choice. The study extends the lawsuit and finance literature by examining unique, hand-collected data sets of employee lawsuits, allegations, violations, settlements, charging parties, case outcomes and case durations.

What makes users willing or hesitant to use Fintech?: the moderating effect of user type

2018 ◽  
Vol 118 (3) ◽  
pp. 541-569 ◽  
Author(s):  
Hyun-Sun Ryu
Keyword(s):  
Least Squares Method ◽  
Original Data ◽  
The Novel ◽  
Continuance Intention ◽  
Content Type ◽  
Factors Affecting ◽  
Proposed Model ◽  
Negative Effect ◽  
Partial Least Squares Method ◽  
Benefit And Risk

Purpose The purpose of this paper is to better understand why people are willing or hesitant to use Financial technology (Fintech) as well as to determine whether the effect of perceived benefits and risks of continuance intention differs depending on user types. Design/methodology/approach Original data were collected via a survey of 243 participants with Fintech usage experience. The partial least squares method was used to test the proposed model. Findings The results reveal that legal risk had the most negative effect on the Fintech continuance intention, while convenience had the strongest positive effect. Differences in specific benefit and risk impacts are found between early and late adopters. Originality/value This empirical study contributes to the novel understanding of the benefit and risk factors affecting the Fintech continuance intention.

CEO compensation, CEO attributes and tax aggressiveness: evidence from French firms listed on the CAC 40

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sawssan Jbir ◽  
Souhir Neifar ◽  
Yosra Makni Fourati
Keyword(s):  
Ceo Compensation ◽  
Chief Executive ◽  
Least Square ◽  
Annual Reports ◽  
Content Type ◽  
Tax Aggressiveness ◽  
Ceo Tenure ◽  
Negative Effect ◽  
The Impact ◽  
Ceo Attributes

Purpose This paper aims to examine the impact of CEO (chief executive officer) compensation and CEO attributes on the level of tax aggressiveness of French companies. Design/methodology/approach The sample comprises 180 firm-year observations of 40 companies listed on the CAC 40 during the period ranging from 2008 to 2018. For the purpose of overcoming the problems of heteroscedasticity and autocorrelation, the authors apply the generalized least square panel regression. Findings This study’s results corroborate the importance of CEO compensation and CEO attributes as determinants of tax aggressiveness. In addition, the authors come up with the fact that CEO compensation has a negative effect on tax aggressiveness, and that older CEOs and CEOs with accounting expertise are negatively linked with tax aggressiveness. The authors also find out that there is a positive relationship between the CEO tenure and tax aggressiveness. Moreover, the authors report that foreign CEOs are more likely to engage in tax aggressiveness practices than local CEOs. Research limitations/implications The unavailability of all annual reports and the use of only one proxy to measure tax aggressiveness present limitations. This study shows significant implications for shareholders, regulators and researchers. As a matter of fact, shareholders will observe the effect of appointing a foreign CEO on the tax aggressiveness level. This study may also provide regulators with new ideas regarding the role of the CEO and its impact on aggressive decision-making. And it brings forth new insight for researchers through adding a foreign CEO as a new determinant of tax aggressiveness. Originality/value According to the authors’ knowledge, this study is the first to provide empirical evidence regarding the effect of both CEO compensation and CEO attributes on tax aggressiveness. It also looks into the impact of a foreign CEO on tax aggressiveness.

CEO social capital and asset sell-offs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Charles Danso ◽  
Margarita Kaprielyan ◽  
Md Miran Hossain
Keyword(s):  
Decision Making ◽  
Social Capital ◽  
Information Asymmetry ◽  
Abnormal Returns ◽  
Chief Executive ◽  
Multivariate Regression Analysis ◽  
Market Model ◽  
Good Decision ◽  
Content Type ◽  
Announcement Returns

PurposeRecent studies explore how chief executive officer (CEO) social capital affects corporate decision-making. Well-connected CEOs can have greater access to information, which can lead to better corporate decisions or permit them to amass power from hierarchy status and make self-serving decisions. This study examines whether investors perceive CEO social capital as a signal of good decision-making (assuming information asymmetry) surrounding asset sell-off events.Design/methodology/approachThe authors use multivariate regression analysis to examine the effect of CEO social capital on the cumulative abnormal returns (CARs) of the asset buyers and sellers. CARs are estimated using a market model in the period proximate to asset sell-off announcements.FindingsThe authors find that CEO social capital is positively associated with announcement returns of the asset sellers. Moreover, the positive effect of CEO social capital on announcement returns is more pronounced for sellers facing greater information asymmetry. An analysis of post-announcement stock performance reveals that the seller CEO social capital is associated with additional value generated for the shareholders of the seller after a month from the announcement date, especially if the transaction price is disclosed. Overall, findings are consistent with the argument that CEO social capital provides value in high information asymmetry environment.Originality/valueTo the authors' knowledge this is the first study to examine the effect of CEO social capital on the shareholders' wealth created by divestitures.

Minding the gap: the effect of CEO underpayment on firm-specific knowledge

2020 ◽  
Vol 24 (9) ◽  
pp. 2107-2125
Author(s):  
Linlin Wang ◽  
Zhaofang Chu ◽  
Wan Jiang ◽  
Yifan Xu
Keyword(s):  
Ceo Compensation ◽  
Equity Theory ◽  
Chief Executive ◽  
Specific Knowledge ◽  
Data Set ◽  
Content Type ◽  
Knowledge Based ◽  
Negative Effect ◽  
Compensation Gap ◽  
Specific Human Capital

Purpose This study aims to build on equity theory to assess the effect of chief executive officer (CEO) underpayment on the accumulation of firm-specific knowledge, accounting for the moderating effects of the CEO compensation gap and the clarity of the board’s informal hierarchy. Design/methodology/approach This study starts with all firms listed in the Execucomp database for the period 1992 to 2006. Then, all data sources are merged and entries with missing information are excluded. The final data set used for model estimations includes 1,152 firm-year observations. The command xtreg in Stata 12 with the fixed-effect option (fe) is used to estimate the relationship between CEO underpayment and firm-specific knowledge. Findings This study proposed and examined the role of CEO underpayment in discouraging CEO willingness to invest firm-specific human capital and, accordingly, to adopt a strategy of accumulating lower levels of firm-specific knowledge assets. The empirical analyses strongly support this argument. Moreover, CEO compensation gaps and the informal hierarchy of boards negatively moderated this relationship. That is, CEO underpayment had a weaker negative effect on firm-specific knowledge when the CEO compensation gap and the clarity of the board’s informal hierarchy were high. Originality/value Prior studies from the knowledge-based perspective have focused on the importance of firm-specific knowledge in enabling a firm to achieve superior financial performance. However, relatively little attention has been paid to CEOs’ willingness to accumulate firm-specific knowledge. The present study contributes to the knowledge-based view of the firm. This study integrates equity theory with the knowledge-based view of the firm by highlighting how unfair compensation of CEOs may discourage them to fully realize a firm’s potential to generate specific knowledge. By incorporating the fairness issue of CEO compensation into the knowledge-based view, this study contributes to a deeper understanding of the origins of firm-specific knowledge.

The gender difference in leadership effectiveness and its Sino-US comparison

2018 ◽  
Vol 12 (1) ◽  
pp. 106-124
Author(s):  
Shimei Yan ◽  
Yike Wu ◽  
Gang Zhang
Keyword(s):  
Gender Difference ◽  
Chief Executive Officers ◽  
Cultural Context ◽  
Leadership Effectiveness ◽  
Chief Executive ◽  
Listed Companies ◽  
Women's Leadership ◽  
Male And Female ◽  
Content Type ◽  
Chinese Listed Companies

Purpose There are mainly two viewpoints on women’s leadership effectiveness compared with that of men – the questioning view and the admiring view, two points of view that are not in agreement. Based on that, this study aims to find the gender difference in leadership effectiveness. Design/methodology/approach This study uses carefully matched male and female presidents (223 pairs) of Chinese listed companies and male and female chief executive officers (141 pairs) of American listed companies as samples. Analysis of variance was conducted to analyze the indicator data of the leadership effectiveness. Findings The findings show that women’s leadership effectiveness is not significantly inferior to that of men, and that women’s leadership effectiveness compared to that of men in the Chinese cultural context is not inferior to that in the American cultural context. The findings do not support the questioning view of women’s leadership effectiveness. Originality/value This study first uses the carefully matched (female/male leaders) data of Chinese listed companies and American listed companies as samples to find which viewpoint (the questioning view and the admiring view) is supported or is not supported.

Audit committee members with CEO experience and the value of cash holdings

2020 ◽  
Vol 35 (7) ◽  
pp. 897-926
Author(s):  
Sunhwa Choi ◽  
Jinwoong Han ◽  
Taejin Jung ◽  
Bomi Song
Keyword(s):  
Audit Committee ◽  
Negative Impact ◽  
Cash Holdings ◽  
Chief Executive ◽  
Policy Implications ◽  
Content Type ◽  
Marginal Value ◽  
Value Of Cash ◽  
Negative Effect ◽  
Accounting Expertise

Purpose The purpose of this study is to examine whether the presence of an audit committee (AC) members with Chief Executive Officer (CEO) experience (supervisory experts) affects the market value of cash holdings. Design/methodology/approach To estimate the marginal value of cash holdings, this study uses the model proposed by Faulkender and Wang (2006). The sample is 2,031 firm-year observations in Korea from 2000 through 2015. Findings The authors find that the presence of supervisory experts on ACs has a negative impact on the value of cash holdings. This result suggests that supervisory experts on ACs weaken monitoring of managerial actions. The authors also find that the negative effect of supervisory experts on the value of cash holdings is mitigated when there are other AC members with accounting expertise. Practical implications The findings that AC supervisory expertise impairs the effectiveness of ACs, and thus destroys shareholder value have policy implications because the current regulations in many countries use a broad definition of financial expertise that includes supervisory expertise. Originality/value This is the first study that directly examines the effect of AC supervisory expertise on the value of cash holdings. The study also contributes to the literature on the role of ACs in emerging markets by documenting the limitations of corporate governance systems adopted from the Anglo–Saxon model.

A Systematic Review of the Factors Affecting the Cyclone Evacuation Decision Process in Bangladesh

2016 ◽  
Vol 11 (4) ◽  
pp. 742-753 ◽  
Author(s):  
Md. Nasif Ahsan ◽  
◽  
Kuniyoshi Takeuchi ◽  
Karina Vink ◽  
Miho Ohara ◽  
...  
Keyword(s):  
Decision Making ◽  
At Risk ◽  
Content Analysis ◽  
Risk Perception ◽  
Early Warning ◽  
Cultural Context ◽  
Risk Perceptions ◽  
Cultural Issues ◽  
Factors Affecting ◽  
Warning Messages

Researchers are investigating a broad spectrum of factors affecting positively and/or negatively the evacuation decision-making process occurring after people at risk receive cyclone warnings and advisories. Previous studies suggest that early warnings themselves do not propagate evacuation processes to be investigated but, rather, that human risk perceptions do so. This in turn encourages the sociopsychological dimensions of risk perception to be evaluated, which must be done within a country’s own cultural context. In applying content analysis here, we review the literature on evacuation decision-making processes during rapidonset hazards, i.e., tropical cyclones, in coastal Bangladesh. We focus on three broad overlapping themes – early warning, risk perception, and evacuation decision-making. Major content-analysis findings suggest that two things – a lack of credibility in early warning messages and an inefficient dissemination process – tend to affect the risk perception of people at risk and are likely to eventually determine the success of evacuation decision-making. Findings also show that different socioeconomic and socio-cultural issues related to risk perception appear to be more influential than formal warning messages in propagating decisions to evacuate during a cyclone. Based on these results, we suggest specific policy recommendations for improving local evacuation efficiency.

Why is evacuation so difficult? Sociocultural aspects of landslide disaster in Ponorogo, Indonesia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dian Purworini ◽  
Desi Puji Hartuti ◽  
Dini Purnamasari
Keyword(s):  
Decision Making ◽  
Communication Strategy ◽  
Sociocultural Factors ◽  
Exploratory Research ◽  
Structured Interviews ◽  
Daily Lives ◽  
Content Type ◽  
Factors Affecting ◽  
Staff Members ◽  
The Republic

PurposeSociocultural aspects of populations residing in disaster-prone areas have not often been discussed in disaster evacuation studies. Therefore, the main purpose of this paper is to describe the sociocultural factors affecting evacuation decision-making.Design/methodology/approachThis was an exploratory research study which used in-depth semi-structured interviews to collect the data. Selection of the informants was also fulfilled via the purposive sampling method with regard to specific criteria. The informants consisted of 20 villagers that had faced a disaster and eight staff members of the Regional Board of Disaster Management of the Republic of Indonesia which is Badan Penanggulangan Bencana Daerah (BPBD), Ponorogo, who had managed it. The data analysis was ultimately performed through thematic coding.FindingsThe results of the coding analysis revealed that sociocultural aspects were among the primary reasons for evacuation decisions before disasters. In this paper, sociocultural factors shaping evacuation decision behavior could be a result of norms, roles, language, leadership, rules, habits, jobs, perceptions, family engagement, as well as other behaviors demonstrated by individuals and the community.Research limitations/implicationsThis study is not analyzing the role of the social organization or a religious one and also the economic aspect in the evacuation decision-making.Practical implicationsThis paper includes implications for the local government and the BPBD Ponorogo to establish an efficient communication strategy persuading villagers to evacuate. In general, formal policies cannot always be implemented in managing disaster; therefore, visible dedication and solidarity of the members are always needed in order to manage evacuation problems.Originality/valueThis paper meets needs for a study delineating sociocultural factors affecting evacuation decisions before disasters strike. Sociocultural theory could also describe real aspects of culture inherent in the daily lives of populations living in disaster-prone areas.

Exploring critical influencing factors for the site selection failure of waste-to-energy projects in China caused by the “not in my back yard” effect

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Xuhui Cong ◽  
Liang Wang ◽  
Li Ma ◽  
M. Skibnewski
Keyword(s):  
Decision Making ◽  
Influencing Factors ◽  
Site Selection ◽  
Information Disclosure ◽  
Analytical Framework ◽  
Waste To Energy ◽  
Fuzzy Decision Making ◽  
Content Type ◽  
Factors Affecting ◽  
Decision Making Processes

PurposeThis study aims to explore the critical influencing factors that lead to the site selection failure of waste-to-energy (WtE) projects in China under the influence of the “Not In My Back Yard” (NIMBY) effect, which can provide references to improve the decision-making process of similar projects in the future.Design/methodology/approachThe fuzzy decision-making trial and evaluation laboratory (DEMATEL) method was used to propose an analytical framework for exploring the critical influencing factors affecting the site selection failure of WtE projects. The causal relationship between different influencing factors is finally determined on the basis of the opinions of 12 experts from universities, government departments, consulting units, planning and design units, construction units and WtE enterprises.FindingsResults showed that six crucial factors resulted in the site selection failure of WtE projects from the NIMBY effect perspective: “Insufficient public participation,” “Near the place of residence,” “Nonstandard government decision-making processes,” “Low information disclosure,” “Destroys the surrounding environment,” and “Imperfect compensation scheme.”Originality/valueResults can determine the priorities and causal relationships among the various influencing factors. The decision-making optimization suggestions can provide reference for decision- makers, thereby possibly promoting the scientific and standardization of site selection decision process.

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