Suchergebnisse

AbstractManuscript TypeEmpiricalResearch Question/IssueThis study analyses whether institutional investment in China is affected by the voluntary corporate social performance (CSP) of firms, after controlling for ownership structure, corporate governance, compensation, and other firm characteristics.Research Findings/InsightsFirms with superior voluntary CSP attract more institutional investment, which remains robust after controlling for the reverse causality problem. Mutual funds are the main driver of the institutional investment pattern in China and they invest more in firms that achieve better voluntary CSP with respect to employment equality and customer care. Insurance companies and social security funds invest more in firms that take care of their customers. Qualified foreign institutional investors (QFIIs) are the only type of institutional investors tilting their investment in favor of firms doing well at saving energy.Theoretical/Academic ImplicationsOur empirical evidence suggests that different types of institutional investors show preferences toward different aspects of investee firms' voluntary CSP. We innovatively separate firms' voluntary CSP into expected components that can be explained by firm characteristics and unexpected components (surprises) that cannot be explained by firm characteristics. Although institutional investors, in general, and mutual funds and QFIIs, in particular, own more shares in firms with more voluntary CSP surprises, only mutual funds trade on them in the subsequent year.Practitioner/Policy ImplicationsForeign institutional investors invest more in firms with better voluntary CSP, especially with respect to energy‐saving and environmental issues, but they do not show a significant preference toward firms with better corporate governance in China. Our paper offers implications for policy makers in transitory and emerging economies with regard to encouraging foreign institutional investors' equity investment.

AbstractManuscript TypeEmpiricalResearch Question/IssueThe Chinese government regulates on the adoption of cumulative voting (CV) in order to protect minority shareholders by allowing them to elect a dissident director. However, adopting CV may deter potential acquirers, reducing the effectiveness of corporate takeover as a governance mechanism. Even worse, lacking enforcement of CV adoption allows firms to adopt CV when they need to deter potential acquirers.Research Findings/InsightsFirst, we find CV adopters have better governance overall, but also have tightened control such as higher ownership concentration. This evidence hints that when a firm adopts better governance to signal the market, it may tighten control in other ways such as increasing shareholder power and adopting CV. Second, we distinguish the role of CV in investor protection by examining its competing effects on tunneling and antitakeover. We find that CV does not reduce tunneling but lowers the probability of CEO turnover and of the firm becoming a takeover target. These results indicate that CV is used as an antitakeover measure in family‐controlled listed companies. Finally, we find that adopting CV has no impact on company performance.Theoretical/Academic ImplicationsOur evidence sheds light on the incentives embedded in the ownership structure that can determine the governance mechanism in family firms.Practitioner/Policy ImplicationsSince 2002, the Chinese Securities Regulatory Commission requires firms with a controlling shareholder holding more than 30 percent of shares to adopt CV. Our study shows that this policy has unintended consequences and does not always protect minority shareholders.

China and East Asian Strategic Dynamics: the Shaping of a New Regional Order, edited by Mingjiang Li and Dongmin Lee, examines how China's remarkable economic growth and its proactive diplomatic efforts in recent years have not only shored up its importance in global issues, but also induced a transformation of the strategic dynamics in East Asia. Given that the rise of China is has been a prominent issue in politics and economics worldwide, this edited collection is essential for a wide audience of policy-makers, academics, and students alike.