STATE OWNERSHIP, CORPORATE TOURNAMENT AND EXECUTIVE COMPENSATION: EVIDENCE FROM PUBLIC LISTED FIRMS IN CHINA

2011 ◽  
Vol 56 (03) ◽  
pp. 307-326 ◽  
Author(s):  
DONGWEI SU
Keyword(s):  
Executive Compensation ◽  
Transition Economy ◽  
Business Environment ◽  
State Ownership ◽  
Pay Gap ◽  
Listed Firms ◽  
Tournament Theory ◽  
Corporate Hierarchy ◽  
Pay Dispersion ◽  
Second Tier

This article tests several predictions of tournament theory on executive compensation in the context of a transition economy. Using an unbalanced panel of 34,701 executives in 1,386 public listed firms in China during 1999 and 2006, the paper finds that (1) pay increases as executives move up the corporate hierarchy into higher ranks; (2) pay gap is the largest between the first- and second-tier executives; (3) pay dispersion increases with the number of tournament participants and the risk of the business environment; (4) state ownership of shares reduces pay, pay gap and the sensitivities of the contestant pool and business risk to pay dispersion; (5) board composition and independence, CEO duality and the independence of the supervisory committee all affect pay and pay dispersion. Overall, this paper shows that listed firms in China, as they become more and more market-oriented, have adopted a pay structure that is largely consistent with the predictions of tournament theory, and that it is important to consider both state ownership and corporate governance in analyzing executive compensation structure.

scholarly journals Chief Executive Officer Compensation and Financial Performance: Evidence from the Alternative Investment Market in the UK

2020 ◽  
Vol 13 (1) ◽  
pp. 63-84
Author(s):  
Danquah Jeff Boakye ◽  
Gabriel Sam Ahinful ◽  
Randolph Nsor-Ambala
Keyword(s):  
Financial Performance ◽  
Executive Compensation ◽  
Chief Executive Officer ◽  
Chief Executive ◽  
Reverse Causality ◽  
Listed Firms ◽  
Tournament Theory ◽  
Executive Remuneration ◽  
The Uk ◽  
The Relationship

Purpose: This article investigates the relationship between executive compensation and financial performance for Alternative Investment Market (AIM)-listed firms in the UK. While most studies have looked at the impact of executive compensation on financial performance, this study argues that the issue of reverse causality cannot be ignored even if it is controlled and therefore investigates the extent to which financial performance can also impact on executive remuneration. Design/methodology/approach: The study relies on a sample of 201 AIM-listed firms in the UK from 2011 to 2016 to examine the relationship between executive compensation and financial performance. It draws on agency and tournament theories to model the relationships between executive compensation and financial performance using various panel regression models. Findings: The findings from the study revealed that the chief executive officer (CEO) remuneration impact on both accounting- and market-based measures of financial performance. It also showed that while performance-based incentives like bonus and other long-term incentives linked to performance significantly impact on financial performance, salary, a cash-based non-performance-related compensation rather negatively affects performance. It was also discovered that financial performance can also influence the level of executive compensation and not always vice versa. Value/originality: The study adds novelties to the existing literature by introducing tournament theory to the studies on the relationship between executive compensation and financial performance. Most of the existing studies have been one sided and emphasise only on the influence of executive remuneration on financial performance. However, based on the tournament theory, the study argued that the issue of reverse causality between the two should not be overemphasised even if it is controlled.

Executive Compensation in S&P500, S&Pmidcap and S&Psmallcap Listed Firms

2007 ◽  
Author(s):  
João Paulo Vieito ◽  
Antonio Melo Cerqueira ◽  
Elísio Brandão ◽  
Walayet A. Khan
Keyword(s):  
Executive Compensation ◽  
Listed Firms

scholarly journals How government withdrawal affects corporate social performance?

2022 ◽  
Vol 25 (1) ◽  
pp. 136-146
Author(s):  
Farman Ullah Khan ◽  
Junrui Zhang ◽  
Sajid Ullah ◽  
Muhammad Usman ◽  
Shahid Ali
Keyword(s):  
Social Engagement ◽  
Corporate Social Performance ◽  
Developing Economies ◽  
Social Performance ◽  
Negative Relationship ◽  
State Ownership ◽  
Political Connection ◽  
Policy Makers ◽  
Listed Firms ◽  
Corporate Social

This study aims to investigate whether government withdrawal affect corporate social responsibility (CSR) performance, and how CEO’s political connection moderates its relationship. We use sample data from Chinese listed firms over the 2010 to 2015 period to test our hypotheses. We find that decrease in state ownership through government withdrawal tends to negatively affect firms’ CSR performance, but the CEO’s political connection weakens its negative relationship and increases the firm’s likelihood towards CSR activities. Our findings imply that firm’s social engagement mainly result from high governmental involvement, and usually from political connections, because such firms are subject to close scrutiny by stakeholders and thus are more likely to improve social performance. Moreover, this research provides important implications to policy makers regarding the social outcomes of government withdrawal and the usefulness of firms’ political connection in developing economies like China. Este estudio tiene como objetivo investigar si la retirada del gobierno afecta al rendimiento de la responsabilidad social corporativa (RSC), y cómo la conexión política del CEO modera su relación. Utilizamos los datos de una muestra de empresas chinas que cotizan en bolsa durante el período 2010-2015 para comprobar nuestras hipótesis. Encontramos que la disminución de la propiedad estatal a través de la retirada del gobierno tiende a afectar negativamente a los resultados de RSC de las empresas, pero la conexión política del CEO debilita su relación negativa y aumenta la probabilidad de la empresa hacia las actividades de RSC. Nuestras conclusiones implican que el compromiso social de las empresas se debe principalmente a la alta participación gubernamental, y normalmente a las conexiones políticas, porque estas empresas están sometidas a un estrecho escrutinio por parte de las partes interesadas y, por lo tanto, es más probable que mejoren sus resultados sociales. Además, esta investigación ofrece importantes implicaciones para los responsables políticos en relación con los resultados sociales de la retirada del gobierno y la utilidad de la conexión política de las empresas en economías en desarrollo como China.

scholarly journals Ownership structure and firm performance in emerging markets: evidence from Chinese listed firms

2009 ◽  
Vol 6 (3) ◽  
pp. 465-472
Author(s):  
Benjamin Ehikioya ◽  
Yuanjin Qin ◽  
Keifa Xie ◽  
Chen ru Yun
Keyword(s):  
Firm Performance ◽  
Ownership Structure ◽  
Negative Influence ◽  
State Ownership ◽  
Legal Person ◽  
Stock Exchanges ◽  
Holding Companies ◽  
Listed Firms ◽  
Panel Data Regression ◽  
Data Regression

This study investigates how ownership structure impacts on the corporate performance of listed firms in China. The study uses sample data of firms listed in the Shanghai and Shenzhen stock exchanges for the five year fiscal period that ended 2005. The results of the panel data regression analysis suggests firm performance to have positive and significant relation with the proportion of shares held by the institution, through the legal person holding companies. In addition, while state ownership indicates negative influence on performance, individual and foreign investors are found to have positive effect on performance, though at a minimal levels. Interestingly, the effect of ownership structure is stronger in firms experiencing the dominance of legal person share holdings over state shares. Further, firm size and ratio of debt to equity are also observed to have influence on the performance of Chinese listed firms. These findings are of great significant to policymakers, academics, shareholders and other stakeholders.

scholarly journals Does corporate ownership affect capital structures and adjustment of capital structures — evidences from Chinese listed companies

2009 ◽  
Vol 6 (4) ◽  
pp. 532-541 ◽  
Author(s):  
Zhengwei Wang ◽  
Wei Lin ◽  
Michael Keefe
Keyword(s):  
Capital Structure ◽  
Transition Economy ◽  
Structural Difference ◽  
Firm Characteristics ◽  
Financial Friction ◽  
Listed Firms ◽  
Optimal Capital Structure ◽  
Study Results ◽  
Optimal Capital ◽  
The Difference

In Chinese transition economy, compared with state-owned firms, private firms face higher financial friction in financing activities, but have more incentive to adjust toward optimal capital structure to maximize the shareholders‟ benefit. Based on panel data of China’s listed firms from 1998 to 2007, we compare the capital structures of state-owned and privately-owned listed firms. The empirical results show that there is structural difference in static capital structure between state-owned and private listed firms while controlling for firm characteristics. We then investigate the difference in dynamics of the capital structure between these two groups of firms. Further study results tell us that the adjustment to an optimal capital structure to be faster for the private firm than for the state-owned firm.

scholarly journals Modeling the Influence of Information Systems on Sustainable Business Performance and Competitiveness

2021 ◽  
Vol 13 (17) ◽  
pp. 9619
Author(s):  
Natasa Djalic ◽  
Milan Nikolic ◽  
Mihalj Bakator ◽  
Zivko Erceg
Keyword(s):  
Sustainable Development ◽  
Information Systems ◽  
Business Performance ◽  
Transition Economy ◽  
Industrial Revolution ◽  
Business Environment ◽  
Future Research ◽  
New Paradigm ◽  
Sustainable Business ◽  
Challenging Environment

The necessity for sustainable development, the coronavirus pandemic, and conducting business within the frameworks of the fourth industrial revolution—Industry 4.0 create a challenging environment where enterprises have difficulties to achieve and maintain competitiveness. Information is becoming a core construct when it comes to conducting business in the modern, globalized business environment. In this paper, the influence of information systems (IS) on sustainable business performance and competitiveness is analyzed. Additionally, the influence of human resource management (HRM) and decision making (DM) on sustainable business performance and competitiveness, as two crucial constructs in the new paradigm of conducting business, are addressed. The relations are discussed from the aspect of sustainable development and future post-pandemic business trends. The main goal is to determine the relations between the noted constructs in a transitional setting. In sum, 184 manufacturing enterprises from Republika Srpska were surveyed via a structured survey, where the focus was on quantifying and modeling the influence of IS, HRM, and DM on sustainable business performance. The results indicate that IS, HRM, DM can affect business performance in a transitional economic setting. This approach is novel, as the existing body of literature does not address all the noted influencing factors on sustainable business performance and competitiveness in a transition economy. Hence, this paper significantly contributes to the existing body of literature and provides a solid basis for future research in this domain.

scholarly journals Three Essays on Corporate Governance in China

2021 ◽  
Author(s):  
◽  
Zonghao Chen
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
State Ownership ◽  
Independent Directors ◽  
Women Directors ◽  
Director Compensation ◽  
Public Firms ◽  
Listed Firms ◽  
Director Characteristics ◽  
Chinese Public

<p>This thesis consists of three empirical papers on corporate governance in Chinese listed firms. The first essay examines the influence of director characteristics and ownership structure on director compensation. Over the period 2005 through 2015, we find that director compensation in Chinese listed firms is influenced by both director characteristics and ownership structure. We measure director compensation by both the propensity to be paid and the level of compensation. For independent directors, we find that director busyness, tenure, and ownership concentration positively influence and state-ownership negatively influences director compensation. For non-independent directors, we find that tenure positively influences and that both state-ownership and related directors negatively influence director compensation. Lastly, our evidence suggests that women directors in China are not underpaid.  The second essay examines the influence of rookie independent directors on board functions and firm performance in Chinese public companies from 2008 to 2014. We find that rookie independent directors attend more board meetings than seasoned independent directors. Independent directors with higher board meeting attendance are more likely to remain in the firm in the following year (lower turnover rate). This influence of board attendance on re-appointment is stronger for rookie independent directors. Further, we find that boards with more rookie independent directors tunnel less to controlling shareholders, suggesting that rookie independent directors are efficient monitors. Lastly, we find that firms with more rookie independent directors are associated with higher accounting returns.  In the third essay, we investigate the influence of board networks on directors’ career outcomes in Chinese public firms from 2005 to 2014. We find that board connections increase compensation for independent directors. We find that board connections are positively associated with director turnover for non-related directors, but negatively associated with director turnover for related directors. Further, we find that board connections lead to additional future directorships. Overall, we find that board connections both directly lead to higher compensation and indirectly through labor mobility and additional board seats.</p>

Female directors on corporate boards and their impact on corporate social responsibility (CSR): evidence from China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Waqas Bin Khidmat ◽  
Muhammad Danish Habib ◽  
Sadia Awan ◽  
Kashif Raza
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Gender Diversity ◽  
State Ownership ◽  
Corporate Boards ◽  
Female Representation ◽  
Content Type ◽  
Listed Firms ◽  
Self Selection ◽  
Corporate Social

Purpose This study aims to examine the determinants of the female representations on Chinese listed firm’s boards. This study also investigates the effect of gender diversity on corporate social responsibility activities. Design/methodology/approach The Tobit regression model is used because the data is censored and using ordinary least square regression can give spurious results. For robust check, the authors also used Heckman’s (1979) two-stage self-selection model to remove the sample self-selection bias. Findings The authors find that the female representations on the corporate board are positively associated with firm age, firm performance, corporate governance, family ownership, institutional ownership and managerial ownership while negatively related to firm size and state ownership. This study also incorporates predictors of the critical mass of women on the Chinese listed firm’s board. The study also tests the female-led hypothesis and concludes that the female representation increases in firms with female chief executive officer (CEO) or female chairpersons. The Chinese listed firms with gender-diverse board are socially responsible. Research limitations/implications The importance of diversity in corporate boards has been demonstrated in light of the agency theory and the resource dependence framework. The results contribute to the previous literature by documenting the determinants of female representations on board, robust by alternative measures of gender diversity, firm size, corporate governance and estimation techniques. Practical implications The economic significance of gender diversity stirred the firms to increase female representation. The policymakers can understand the reasons for female underrepresentation in Chinese boards and can reform the regulation to enhance governance quality, non-state ownership and risk aversion among the listed firms. Originality/value This study contributes to the literature by providing empirical evidence on the key predictor of the world’s largest emerging economy, specifically the study focuses on the firm specific determinants, different governance attributes, ownership structure and firm risk measures. This study also seeks to answer if the presence of a female in the Chairperson or CEO position encourages the firms to hire more female directors or not?

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