Search Results (44)

Amidst global imperatives for environmental sustainability, this study investigates the nexus between carbon emissions reduction (CER), ownership structures, and total factor productivity (TFP) in Chinese enterprises—recognized as vital economic drivers facing carbon emissions pressures. Based on the theoretical frameworks of innovation offsets, agency cost theory, and upper echelons theory, with data from CSMAR (2009–2023), we proposed a positive effect of CER on TFP while examining the moderating roles of ownership structure metrics: chairman shareholding ratio, manager shareholding ratio, and ownership–control separation ratio. TFP estimation employed dual approaches: mean consolidation (TFP-Mean) and entropy weighting (TFP-Entropy) methods. The results confirmed CER exerts significantly positive impacts on TFP, with ownership structures demonstrating statistically significant yet directionally heterogeneous moderation effects. Heterogeneity analysis reveals heightened TFP sensitivity to carbon emission initiatives among private enterprises, foreign-owned enterprises, and small enterprises. Notably, the entropy weighting method exhibits substantial comparative advantages in TFP measurement. These findings underscore that advancing TFP necessitates simultaneously optimizing carbon emissions efficiency and ownership governance. Full article

Environmental, Social, and Governance (ESG) management has global relevance, yet its effects differ across contexts. In Korea, with concentrated ownership, family-controlled conglomerates, and evolving governance norms, the ESG–firm performance link offers unique insights. This study examines 620 publicly listed firms in Korea over the 2020–2022 period to assess the effects of ESG performance on firm value (Tobin’s q) and financial performance (operating return on assets). Three governance-related variables that reflect the distinctive features of Korea’s corporate governance—CEO (chief executive officer) tenure, the shareholding ratio of the largest shareholder, and foreign ownership ratio—are included in the analysis as moderating variables. Results show that ESG performance positively affects both firm value and financial performance. Also, CEO tenure and foreign ownership significantly strengthen the ESG–firm value relationship, whereas the shareholding ratio of the largest shareholder enhances the ESG–financial performance link. These findings extend stakeholder, legitimacy, and institutional theories to an East Asian context and offer practical guidance for managers and policymakers aiming to enhance corporate outcomes through ESG strategies in Korea’s distinctive governance environment. Full article

This study is motivated by the rising global demand for sustainable development and the increasingly important role of foreign institutional investors in shaping corporate behavior in emerging markets. It aims to investigate whether and how qualified foreign institutional investors (QFIIs) influence the Environmental, Social, Governance (ESG) performance of Chinese listed companies. Using panel data from Chinese A-share listed firms between 2009 and 2022, this study employs a two-way fixed-effects model to examine the impact of QFII shareholding on corporate ESG performance and its underlying mechanisms. The findings reveal that QFIIs significantly enhance ESG performance, primarily through promoting green technology innovation, green investment, and green expenses. Furthermore, a composite index of information transparency is developed to investigate its moderating effect, uncovering a substitution effect: QFIIs’ marginal governance impact diminishes in highly transparent firms. Notably, the mediation analysis reveals that QFIIs enhance ESG performance through multiple environmental investment pathways—green innovation, green investment, and green expenses—while the moderating effect of information transparency suggests that QFIIs exert greater influence in less transparent firms. This research advances the theoretical understanding of foreign institutional investors’ influence on sustainability in emerging markets and provides actionable insights for policymakers seeking to align foreign capital with green transition goals. Full article

The primary objective of this study is to investigate the intricate relationship between different ownership structures, such as family, institutional, managerial, and foreign ownership, and tax avoidance practices. It also seeks to explore the moderating influence of female board members in shaping these relationships. This study utilizes balanced panel data from 72 industrial and service firms listed on the Amman Stock Exchange during the period of 2018 to 2023. The Generalized Method of Moments (GMM) was employed to estimate the results. The results indicate that family and foreign ownership positively influence tax avoidance practices, suggesting that families may engage in tax avoidance to benefit from rent extraction, while foreign investors may pressure managers to manipulate tax liabilities or shift profits across countries to minimize taxes. In contrast, the presence of female directors as well as institutional and managerial ownership is associated with a reduction in tax avoidance. Female directors play a moderating role in the relationship between ownership structure and tax avoidance. Their presence in interaction with institutional ownership reduces tax avoidance by focusing on tax compliance strategies. However, this effect changes in family and foreign-owned firms, where control over decision-making lies with the families or foreign shareholders, limiting the impact of female directors in promoting compliance and aligning their role with the tax avoidance strategies preferred by the controlling owners. Full article

Under the pressure of the global low-carbon transition, green initiatives have gradually emerged as a critical direction for outward foreign direct investment (OFDI). In the context of China’s high-level opening up, environmental, social, and governance (ESG) performance can promote sustainable development of firms. However, there is lack of research on the influence of ESG performance from the perspective of corporate green OFDI. This study examines the impact mechanism of ESG performance on corporate green OFDI in terms of its propensity and depth, using a sample of Chinese A-share listed firms from 2009 to 2023. The findings indicate that ESG performance promotes corporate green OFDI, a result that remains robust after a series of endogeneity and robustness tests. The internal mechanism analysis reveals that ESG performance enhances corporate green OFDI by reducing financing constraints and managerial myopia and by promoting risk-taking and foreign institutional investors’ shareholdings. The external mechanism analysis verifies that ESG institutional constraints in the home country and ESG locational advantages in host countries strengthen the positive effect of ESG performance on corporate green OFDI. Further analysis shows that ESG performance facilitates corporate green innovation development through collaborative and independent innovation by promoting corporate green OFDI. By extending the theoretical understanding of the impact of ESG performance on the process of corporate green OFDI, this study provides strategic guidance for the sustainable development of firms in China and other similar developing countries. Full article

This study empirically examines the determinants of merger and acquisition (M&A) activities in Vietnam from 2005 to 2020, which has not been examined before, using a fixed-effects model for a sample of 674 completed M&A deals. The results indicate that targets’ corporate governance and deal characteristics have mixed effects on M&A decisions. More specifically, the independent member of the board and CEO duality of the target is negatively associated with most M&A types, except for cross-border mergers. However, the impact of targets’ blockholders is consistently positive regardless of M&A types. When observing the deal characteristics, mixed evidence is also found in the case of M&A payment form, industry-relatedness between the bidder and the target, the bidder’s stake in the target, and foreign ownership in the bidder’s stake. More interesting, our study emphasizes that voluntary agreement is seemingly critical to M&A decisions regardless of different types. Our results suggest several important implications, including balancing independent directors on the board, accounting for CEOs’ and other blockholders’ interests and influence, considering the types of M&A payments, and involving foreign investors in M&A activities. By understanding these implications, firms can better navigate the complexities of M&A transactions, enhancing their decision-making processes and ultimately contributing to improved shareholder value. Full article

Recent years have seen the influence of both institutional investors and corporate social responsibility strengthen in the Chinese capital market. However, research on the impact of these market changes on corporate activities and values has been insufficient. To address this gap, this study analyzes the impact of foreign and domestic institutional investors who invest in Chinese A-share listed companies on corporate value through environmental, social, and governance (ESG) policies. The results of the analysis are as follows: First, the shareholding of both foreign institutional investors (FIIs) and domestic institutional investors (DIIs) enhances corporate value. Second, the shareholding of FIIs strengthens the company’s ESG, while that of DIIs does not significantly affect it. Third, ESG has a positive impact on corporate value. Fourth, ESG partially mediates the positive relationship between the shareholding of FIIs and corporate value. The research findings provide academic implications for the causal relationship between corporate governance, sustainable management, and performance, as well as practical implications for the development of the Chinese capital market and corporate sustainability. Full article

Because the PCAOB was unable to inspect audits of Chinese accounting firms until recently, regulators introduced legislation (HFCAA) potentially forcing Chinese companies to delist for non-compliance with PCAOB audit requirements. To understand the equity markets’ response to this legislation, we analyze the short-term (event study) and long-term stock performance of U.S.-listed Chinese firms relative to the stock performance of other foreign companies. We find that Chinese companies outperform other Asian firms for the Pre-HFCAA Period, but they underperform other Asian firms from the time the HFCAA was introduced (28 March 2019) until an agreement was reached (26 August 2022). For the post-agreement period (26 August 2022 to 31 December 2022), the performance of Chinese and other Asian stocks is similar. Between 28 March 2019 and 31 December 2022, a typical shareholder lost 76% of wealth, and, compared to other Asian companies, the losses were around 87%. The findings highlight the importance of regulatory compliance and transparency in maintaining investor confidence and protecting shareholders’ interests. Full article

Sustainable corporate governance increasingly influences corporate strategy considerations. Effective governance ensures organizational sustainability, with ESG being a crucial component. Large shareholders, as direct stakeholders, have a key role in developing and implementing corporate ESG strategies. Using data on Chinese listed firms over the 2011–2022 period, we find that multiple large shareholders (MLS) depress company ESG performance, suggesting that MLS may lead to friction and high coordination costs. Interestingly, stronger controlling shareholders mitigate this negative impact, particularly when they are state-owned. Our analysis shows that relatively equal power among MLS exacerbates friction, resulting in unstable executive teams and higher internal pay gaps, which lower governance (G) and social (S) scores. However, the presence of foreign and institutional investors among the large shareholders can alleviate these issues. The negative effect of MLS on ESG is significant in firms operating in clean industries, those with low analyst attention, or those not part of the “Stock Connect Scheme”. This study highlights the drawbacks of MLS in sustainable corporate governance from an ESG perspective. Full article

This article aims to assess the usefulness of excess market value added to equity as an external measure of company value creation from the perspective of meeting shareholder expectations. This measure compares the expected value as an increase in stock exchange capitalisation in relation to return on equity, equivalent to its cost, decreased by this capital, in relation to the actually achieved level of capitalisation. This paper investigates relations with other external and internal measures. This research is based on measuring value creation in WIG30 Warsaw Stock Exchange companies in 2017–2023. The assessment of the research results was based on mathematical statistics tools, the density measure and the taxonomic measure of similarity. The study tested four hypotheses. The results of this research showed that the excess measure does not distort market information and can be used to assess the effectiveness of shareholder value creation, taking into account shareholder expectations. Secondly, the paper pointed to an unsatisfactory level of value creation in WSE WIG30 companies. The negative assessment of value creation management refers both to effectiveness and efficiency. Thirdly, shareholders continue to use classical financial measures despite the existence of a wide spectrum of value measures. Fourthly, the paper points to the lack of theoretical equality between the market value added (an external measure) and capitalised economic value added (an internal measure). The presented research contributes to unbiased assessments of whether or not shareholder value is simultaneously created and realised in increased share prices (capitalisation) to a higher degree than shareholder expectations. Up to now, no such research studies have been conducted for Polish and foreign capital markets. The research methodology has practical applications in expectations-based management. Full article

From the perspectives of ownership dispersion degree after the entry of foreign shareholder and the foreign ownership participation level, respectively, this paper takes Chinese hybrid OFDI state-owned listed industrial companies from 2007 to 2019 as samples, using 3799 observations, to study the impact of foreign ownership on the innovation of OFDI SOEs. We find that compared to the ownership dispersion degree after the entry of foreign shareholder, the foreign ownership participation level plays a more active role in the innovation of OFDI SOE. This positive effect is stronger for non-state-holding enterprises and high-pollution industries. Further analysis reveals that the relationship between foreign ownership and the innovation of SOE is mediated and moderated by the host country’s innovation level and government innovation subsidies, respectively. In addition, in comparison with the ownership dispersion degree after the entry of foreign shareholders, the mediating effect of the host country’s innovation level and the moderating effects of government innovation subsidies are significantly enhanced by the foreign ownership participation level. These findings can promote the study of the relationship between mixed-ownership reform and the innovation of Chinese OFDI SOEs. By verifying the impact of foreign ownership on the effectiveness of OFDI SOE innovation, this paper provides a new perspective on the study of mixed-ownership reform. This paper aims to expand the research field on the relationship between mixed-ownership reform and OFDI SOE innovation, providing theoretical implications and facilitating the policy design of promoting SOE reverse technology spillovers through their governance structural reform. Full article

This study presents current evidence on the impact of different corporate ownership types on audit quality in Oman and potentially in other developing countries with similar institutional environments, such as GCC countries. While previous research has primarily focused on overall ownership concentration, this study aims to examine the role of specific shareholder identities and their influence on the demand for audit quality. This research sheds light on the relationship between ownership identities and audit quality of Omani financial companies listed on the Muscat Stock Exchange from 2014 to 2020. This study employs additional analysis to mitigate potential confounding factors and ensure robust results. Additionally, a GMM test establishes the robustness of our findings, alleviating potential endogeneity concerns. The findings highlight the positive impact and significance of bank, government, and foreign ownership in promoting high audit quality. In contrast, ownership by financial institutions (non-banks) and block holder concentrations negatively and significantly impact audit quality. In addition, this study found that family members on boards play positive moderating roles in the relationship between ownership concentration and audit quality. In addition to contributing to the existing literature, this study provides valuable insights for regulatory bodies to consider the role of ownership types in their decision-making processes. Our findings also assist investors in making informed choices and offer a better understanding of how ownership structures influence audit quality for other stakeholders. The implications of this research extend beyond Oman and can be relevant to countries with similar ownership structures and regulatory frameworks. Full article

Introduced in 2013, the Belt and Road Initiative (BRI) emerged as a crucial catalyst in facilitating outward foreign direct investment (OFDI) of Chinese private enterprises. While the majority of BRI participant countries are characterized by high risk of violent conflicts, we have limited understanding of why firms invest in such regions despite such inherent risks. Thus, the aim of this study is to unveil the determinants of engagement in risky investment projects. Drawing on the literature of international business and strategic management, this study seeks to examine the relationship between CEO tenure and its impact on the likelihood of undertaking risky investments in the context of Chinese private firms in BRI participant countries. Using the sample of 1140 listed privately owned Chinese multinational enterprises (MNEs) that invested in at least one foreign country between 2013 and 2019, panel logistic regression was conducted to test the hypothesized relationships. The findings of this study indicate that the longer the CEO holds their position, the less likely the firm is to undertake risky investments. Moreover, when the longevity of CEO tenure is coupled with the presence of a dominant shareholder, this effect is further exacerbated. Furthermore, when a long-tenured CEO serves as the chairman of the board, the resistance to undertaking risky investment becomes stronger. By highlighting the effects of CEO tenure, as well as the relationship between governance characteristics and engagement in risky investment projects, this study suggests a sustainable corporate governance structure to build a transparent decision-making process for both investing firms and the host countries. Full article

This study examined credit risk management and return on equity of Nigerian deposit money banks (DMBs) twelve (12) years (2010–2021) post-adoption of the common accounting year-end as mandated by the Central Bank of Nigeria (CBN) in 2009. Our data set comprises independent variables of capital adequacy ratio (CAR), liquidity ratio (LQR), loan-to-deposit ratio (LDR), risk asset ratio (RAR), non-performing loans ratio (NPLR), loan loss provision ratio (LLP), and size (SZ). Our dependent variable is the return on equity (ROE). Using a panel data regression analysis, we found that CAR, RAR, NPLR, and SZ are the significant determinants of ROE. We also found that Nigerian DMBs now significantly rely on offshore borrowings in Eurobonds to create risk assets to overcome CBN’s constriction on using local depositors’ funds to create risk assets. Furthermore, we found that shareholders of DMBs with international banking licenses in Nigeria within the study period were not significantly more compensated for their risk exposure than investors in risk-free assets (treasury bills). Therefore, the CBN should continue strengthening its regulatory functions with regular reviews that would compel improvements of the DMBs’ credit risk management systems to mitigate the likely failure of the credit life cycle of granted loans. Additionally, a review of its current regulatory cash reserve ratio of 37.5% is imperative to reduce DMBs’ dependence on offshore funding and its associated foreign exchange risk. Full article

Stock price prediction is a significant area of research in finance that has been ongoing for a long time. Several mathematical models have been utilized in this field to predict stock prices. However, recently, machine learning techniques have demonstrated remarkable performance in stock price prediction. Moreover, XAI (explainable artificial intelligence) methodologies have been developed, which are models capable of interpreting the results of machine learning algorithms. This study utilizes machine learning to predict stock prices and uses XAI methodologies to investigate the factors that influence this prediction. Specifically, we investigated the relationship between the public’s interest in artists affiliated with four K-Pop entertainment companies (HYBE, SM, JYP, and YG). We used the Naver Keyword Trend and Google Trend index data for the companies and their representative artists to measure local and global interest. Furthermore, we employed the SHAP-XGBoost model to show how the local and global interest in each artist affects the companies’ stock prices. SHAP (SHapley Additive exPlanations) and XGBoost are models that show excellent results as XAI and machine learning methodologies, respectively. We found that SM, JYP, and YG are highly correlated, whereas HYBE is a major player in the industry. YG is influenced by variables from other companies, likely owing to HYBE being a major shareholder in YG’s subsidiary music distribution company. The influence of popular artists from each company was significant in predicting the companies’ stock prices. Additionally, the foreign ownership ratio of a company’s stocks affected the importance of Google Trend and Naver Trend indexes. For example, JYP and SM had relatively high foreign ownership ratios and were influenced more by Google Trend indexes, whereas HYBE and YG were influenced more by Naver Trend indexes. Finally, the trend indexes of artists in SM and HYBE had a positive correlation with stock prices, whereas those of YG and JYP had a negative correlation. This may be due to steady promotions and album releases from SM and HYBE artists, while YG and JYP suffered from negative publicity related to their artists and executives. Overall, this study suggests that public interest in K-Pop artists can have a significant impact on the financial performance of entertainment companies. Moreover, our approach offers valuable insights into the dynamics of the stock market, which makes it a promising technique for understanding and predicting the behavior of entertainment stocks. Full article