Influence Of Shareholders Research Articles

Impact of retail shareholders on corporate green transformation: a deep learning analysis

ABSTRACT The environmental consciousness of retail shareholders is gradually increasing, and their strong green calls may play an important role in corporate green transformation. Using data from Chinese A-share listed companies from 2010 to 2021 as research samples, we employed a LSTM deep learning model to identify questions related to corporate green development posed by retail shareholders on interactive platforms. We investigated the impact of retail shareholders’ green calls on corporate green transformation. The results show that retail shareholders’ green calls can drive corporate green transformation. This is achieved by retail shareholders increasing the pressure perceived by management and reducing management’s short-sighted behaviour. Heterogeneity analysis reveals that when management’s reply is more positive and more readable, management is more likely to drive corporate green transformation. Moreover, when the influence of major shareholders and management is weaker, retail shareholders are more capable of exerting their role in governance. This study provides empirical evidence for retail shareholders to leverage interactive platforms for green governance.

Activism Beyond Ownership: Advisory Role as a Means of Shareholder Influence

Activism Beyond Ownership: Advisory Role as a Means of Shareholder Influence

The Influence of Non-Controlling Majority Shareholders ' Exit Threat on Risk-Taking—— Based on The Research of Manufacturing Industry

The Influence of Non-Controlling Majority Shareholders ' Exit Threat on Risk-Taking—— Based on The Research of Manufacturing Industry

Controlling non-controlling shareholders: The case of effective control

Abstract One of the most important developments underlying capital markets in recent years is the increase in the influence of activist minority shareholders. In a company without a controlling shareholder, dominant and activist shareholders, who hold only a low proportion of the company’s shares, can influence and even tip the scales in the decisions made and direct the company’s business. The legal system therefore imposes a fiduciary duty not only on controlling shareholders but also on those with effective control. Alongside the obligation, however, the absence of a clear and explicit definition of the concepts of effective power and effective control stands out. The Article empirically analyzes key court decisions litigated under Delaware law and finds that only two explanatory variables significantly explain court decisions in cases where the question of effective control arises. It therefore proposes a test for estimating shareholders’ effective power borrowed from the field of cooperative game theory. The test is based on the Shapley Value and Shapley and Shubik’s Power Index. The Article presents its application to decisions made at shareholders’ meetings to estimate the effective power of activist minority shareholders in various decisions. This test is simple to operate, objectively examines the situation based on the factual system that existed at the time the decision was made, and is not limited to specific ownership structures, particular markets, or current times. Adoption of the test is expected to increase the legal certainty regarding the imposition of duties on activist minority shareholders with effective control, thereby reducing the agency costs created as a result of the gap between their formal share in the corporation and their effective power.

Shareholder value orientation, corporate cash piles, and the myth of financial accumulation

Financialization scholars argue that the growing financial balance sheets of non-financial corporations indicate a “financial turn in accumulation” driven by the rise of shareholder value orientation (SVO). In this paper, I test whether greater shareholder influence or shareholder-aligning managerial incentives can explain the more rapid accumulation of financial assets among US NFCs. I find that shareholder power is associated with some increase in short-term financial assets but only in the case of certain shareholder types, in particular high turnover institutional investors. The magnitudes of the effect are small however, and only pertain to smaller firms. Moreover, ownership concentration by these impatient investor types is declining. The results suggest that changing corporate governance patterns have little capacity to explain balance sheet financialization. I argue that mainstream accounts focused on the precautionary savings of new, research-intensive firms and tax arbitrage amongst multinationals offer a better explanation for growing financial balances than the financial accumulation hypothesis. Neither of these imply a substitution of financial for real investment, which calls into question an important mechanism thought to connect financialization to secular stagnation and rising inequality.

Can State-owned Shareholders' Participation Curb Stock Price Crash Risk? --Based on Empirical Evidence of A-share Private Listed Companies from 2008 to 2019

After state-owned shareholders buy shares in private listed companies, they will more or less bring about some changes in the development of private listed companies. The existence of state-owned shareholders can enable listed companies to obtain more resources, which will play a certain role in promoting the company's operation. These favorable conditions will also attract more attention from the outside world. In order to study whether these changes will affect or restrain the company's stock price crash risk during the company's development, we take the stock price data of private listed companies in A-shares from 2008 to 2019 as the object of analysis. This paper studies the influence of state-owned shareholders' participation on the risk of stock price collapse of private companies. Through the regression model analysis, it is found that there is a significant negative correlation between the state-owned shareholders' participation in the private listed company and the company's stock price crash risk, that is, the state-owned shareholders' participation in the private listed company can significantly restrain the company's stock price crash risk.

Do financial crises moderate the influence of stakeholder rights protection on M&A activity: The influence of institutional logics and power?

AbstractResearch SummaryM&A represents a contested process of change in control influenced by two contending prevailing institutional logics: shareholder‐centered and labor‐oriented. These logics, whose respective power is influenced by national laws, shape mergers and acquisition (M&A) outcomes. Crises, like systemic financial crises, are periods during which these logics may be altered. This research examines how financial crises affect the positive (negative) relationship between the legal protection of shareholder (labor) rights and M&A activity in a country. Utilizing a dataset from financial services companies across 35 countries from 1990 to 2016, we find that financial crises significantly weaken the effects of both shareholder and labor rights on M&A transactions. Our findings emphasize the role of power dynamics amidst conflicting institutional logics in determining M&A outcomes during both crisis and non‐crisis periods.Managerial SummaryIn the world of mergers and acquisitions, the battle for control is influenced by two major opposing forces: shareholders and employees, with their power rooted in the country's laws. Countries with high protection of shareholder rights witness higher M&A activity compared to those more protective of labor rights. However, drawing from data covering financial services firms in 35 countries from 1990 to 2016, we discovered that financial crises tend to weaken the influence of both shareholder and employee rights on M&A deals. This insight highlights the importance of understanding the differences in the functioning of the M&A market across countries and the shifting power dynamics between shareholders and employees, especially in times of financial uncertainty, for those involved in planning and executing M&A strategies.

Unveiling the link between female directors’ attributes, ownership concentration, and integrated reporting strategy in Malaysia

In response to the reform in the Malaysian market that requires all publicly listed companies (PLCs) to have at least one female director on the board, this study examines how female directors’ attributes (FDAs) shape integrated reporting quality (IRQ) and assesses the potential influence of substantial shareholders on the FDA–IRQ nexus. Using all Malaysian PLCs implementing the integrated reporting from 2017 to 2021, our analysis yields four key findings. First, a positive relationship exists between the presence of a Muslim female director and IRQ. Second, female directors with financial expertise and those with higher education positively impact IRQ. Third, the holding of multiple directorships by female directors is negatively linked to IRQ, and the length of their tenure shows no significant effect. Fourth, the relationship between FDAs and IRQ is more pronounced in contexts with a greater ownership concentration. These results remain robust after rigorous analysis and mitigating for potential biases. Our findings offer valuable insights for policymakers, practitioners, and researchers interested in understanding the implications of gender diversity and IRQ in emerging markets.

Shareholders' political hierarchy and regulatory enforcement: Evidence from corporate risk management

In our study, we investigate the impact of shareholders' political hierarchy on regulatory enforcement within the context of a Chinese local state-owned enterprise where multiple government shareholders, each with different political hierarchical levels, coexist. Our research reveals that the presence of higher-level noncontrolling government shareholders, specifically noncontrolling government shareholders with a higher hierarchical level than the controlling government shareholders, enhances the risk-reducing effect of derivative use. This indicates that higher-level noncontrolling government shareholders play a role in facilitating the enforcement of derivative-related regulations. Additionally, we find that these higher-level noncontrolling government shareholders enhance the efficiency of derivative use through two primary channels: their superior access to regulatory information and their monitoring of corporate regulatory compliance. We also explore the impact of higher-level noncontrolling government shareholders in regulatory enforcement by examining the 2009–2010 top-down derivative-related regulation. In summary, our analysis underscores the positive influence of higher-level noncontrolling government shareholders on risk management efficiency, primarily due to their information advantage regarding regulations, which subsequently strengthens the enforceability of regulatory measures.

Sustainable city development from the perspective of corporate green innovation and governance

The global consensus on green and city sustainable development is reshaping corporate innovation concepts, strategies, and practice. In the context of Chinese "carbon peak" and "carbon neutrality", encouraging corporate green innovation has become the focus of academic and government attention. As the core element to achieve the goal of city sustainability, corporate green transformation brings technological innovation and the business model change, which impact on firm pollutant discharge, consumer behavior and stakeholder value. These synergies effect provides a green, healthy, and sustainable living environment for city development. Based on the perspective of Stakeholder Influence Theory, this study explores the positive effects of Shareholder Influence on corporate green innovation by empirically testing 17,923 observations of 3205 A-share listed companies in China from 2011 to 2020. The results shows that the decision-making efficiency with Shareholder Power Influence and information advantage with Shareholder Network Influence both promote corporate green innovation. Among them, the power and network of the Top Management Team (TMT) play a moderating role. This study emphasizes the driven force of corporate governance in the context of city sustainable development and puts forward the economic agenda and requirements to achieve cities' low-carbon transformation.

The role of large shareholders in goodwill impairment decisions – Evidence from China

Our paper examines how large shareholders manage goodwill impairment to inflate earnings as well as the role of audit functions in this setting. The influence of large shareholders on corporate decisions is well documented, however, overlooked in goodwill literature. Using data from China, we find that a higher ownership percentage held by large shareholders associates with a lower likelihood of recording goodwill impairment as well as a reduced impairment amount, suggesting that goodwill impairment is intentionally avoided or decreased by large shareholders. We further find that the presence of big4 auditors mitigates such relationship.

Shareholder Activists and Frictions in the CEO Labor Market

ABSTRACT Using hand-collected data on CEO appointments during shareholder activism campaigns, this study examines the relation between activist involvement in CEO recruiting and frictions in CEO hiring decisions. The results indicate that appointments of CEOs who are recruited with shareholder activist influence are associated with more favorable stock market reactions and stronger profitability improvements than appointments without activist involvement. In contrast, I find little evidence that shareholder influence is followed by the recruitment of CEOs who implement myopic corporate policies. Additional analyses reveal positive associations between activist involvement and (1) the amount of resources being dedicated to the CEO search process and (2) the propensity to recruit CEOs from outside the firm. These findings extend the CEO labor market literature, which so far focuses mainly on the decision to remove incumbent CEOs and provides limited insights into CEO recruiting. JEL Classifications: G23; G32; G34; M12; M51.

Do professional shareholders matter for corporate compliance with IFRS reporting requirements: the moderating effect of board independence

PurposeFrom an agency theory realm, this study aims to respond to the more recent calls to deeply analyze the indirect influence of professional shareholders, namely, institutional, blockholder and foreign owners, on the extent of compliance with International Financial Reporting Standards (IFRS) mandatory reporting requirements.Design/methodology/approachMultivariate regression analysis was applied. Moreover, quantitative static and dynamic panel data have been used. More plainly, ordinary least squares was run as a baseline estimator. Afterwards, one-step system generalized method of moment and two-stage least squares were conducted to control for the potential endogeneity dilemma. The analysis is based on a sample of nonfinancial listed firms on the Palestine Stock Exchange for the time span of 10 years, from 2010 to 2019.FindingsAfter controlling for the detrimental effect of the endogeneity issue, the findings clearly reveal that the effect of the three types of professional shareholders (institutional, blockholder and foreign) on the extent of compliance with IFRS is more significant under a high proportion of independent nonexecutive directors.Originality/valueTo the best of the author’s knowledge, prior literature on the nexus between shareholding structure and compliance level with IFRS has restricted solely to analyzing the direct influence without casting the light on the moderation effect of independent nonexecutive directors. Hence, analyzing this sensitive configuration merits attention. In this vein, to ameliorate the compliance level with IFRS, regulators have to devote remarkable effort to updating both enforcement mechanisms and best practices of shareholding structure simultaneously.

Has shareholder background been priced?–Evidence from the issuance of financial bonds by financial leasing companies

This paper analyzes the influence of sponsors and major shareholders on the financing costs of financial leasing companies. Based on the natural experiment of financial leasing companies issuing financial bonds, we find that the financing cost of financial leasing companies controlled by non-banks is significantly higher than that controlled by banks, and the cost of financing for financial leasing companies is generally cheap when the largest shareholder is larger and more profitable. Further, the financing cost of the financial leasing companies controlled by banks is mainly affected by its factors, while the other is significantly affected by the basic characteristics of major shareholders.

Counterbalance effect of multiple major shareholders in Chinese listed companies: A strategic decision-making perspective

The ownership structure of multiple major shareholders is very prevalent among China’s listed companies and has a vital impact on corporate strategy. This study examines the influence of multiple major shareholders on corporate differentiation strategy in Chinese listed companies. The results show that multiple major shareholders promote the decision and implementation of enterprise differentiation strategy. Board capital width and depth play a mediating role. Financial redundancy and corporate competitive culture positively moderate the relationship between multiple major shareholders and differentiation strategy, while human resource redundancy has a negative effect. Further research shows that in enterprises with multiple major shareholders, differentiation strategy can improve performance. From the perspective of equity balance, this study examines the role of multiple major shareholders in emerging markets to provide insights for improving the modern corporate governance system and guidance for enterprises to implement competitive strategies.

Governance Components and Social Performance: Company Analysis of G20 Countries

This study is aimed to obtain empirical evidence of the influence of Management, Shareholders, and CSR Strategy on the Social Performance of companies from countries listed in the G20 forum. The study also used four control variables: Firm Size, Firm Age, Firm Leverage, and Firm Profitability. The data used is secondary data from the Thomson Reuters Eikon database of 60 companies engaged in Consumer Non-Cyclicals (Staples), more specifically, namely those engaged in the Food and Beverages sector in 2012-2021. This study used Panel Data Regression Analysis; Fixed Effect Model with the help of STATA 17. The results of this study show that Management and CSR Strategy have a significant and positive effect on Social Performance. Meanwhile, Shareholders have an insignificant and negative influence. This research adds to the high value of the scientific literature because it provides a good overview and basis for understanding how companies can provide Social Performance in accordance with company policies and performance.

The influence of non-controlling major shareholder's exit threat on firm's idiosyncratic risk

Non-controlling major shareholders can effectively restrain controlling shareholders and management by exit threat, so as to participate in corporate governance. Traditional research holds that the exit threat of non-controlling major shareholders can make the company have a more stable development prospect, but it has not paid enough attention to the hidden dangers. Based on 23,243 samples of Shanghai and Shenzhen A-shares from 2010 to 2021, this paper analyzes the influence of non-controlling major shareholder's exit threat on idiosyncratic risk of enterprises. It is found that the exit threat of non-controlling major shareholders will significantly increase the idiosyncratic risk of enterprises. Overall, exit threat lead to increased idiosyncratic risk. This conclusion is still robust after controlling for endogenous problems. The reason why the exit threat amplifies the idiosyncratic risk is that the idiosyncratic volatility is the market's response to the increased uncertainty of the future return rate of individual stocks, while the high exit threat of non-controlling major shareholders of a company exposes the future uncertainty of the company to investors more. This paper reveals that the threat of exit is the key factor affecting the idiosyncratic risk of firms, which has important reference value for regulators and investors.

How Does a Regulatory Minority Shareholder Influence the ESG Performance? A Quasi-Natural Experiment

Based on China’s newly established Securities Investor Services Center (CSISC), a minority shareholder protection mechanism, we investigated how the CSISC shareholder influences the ESG performance of listed companies. Using a difference-in-differences analysis for a sample of Chinese listed companies during 2013–2017, we found that the pilot reform of CSISC shareholding has a positive influence on the ESG performance of listed companies. We also found that this effect exists in large companies and in companies in non-high-polluting industries. Besides, analysts’ attention, external auditing quality, institutional shareholding, and highly-developed market intermediary and legal systems can strengthen the effect of CSISC shareholding on corporate ESG performance. Our findings inspire regulators in emerging markets to establish suitable mechanisms to protect minority shareholder rights in the long run.

Research on the influence of minority shareholders' online voting on enterprise innovation -- An empirical study of the A-share listed companies in China’s Shanghai and Shenzhen Stock Exchanges

Minority shareholders are important stakeholders of the company, which could influence the corporate innovation to a certain extent. This paper studies the impact of online voting by minority shareholders on corporate innovation, which could enrich the research and expand the theoretical mechanism of the voting role of small and medium shareholders. Taking the 2008-2020 years of China's A-share listed companies as a sample and using the relative proportion of minority shareholders to attend the general meeting to measure the online voting of minority shareholders and the rate of R&D investment to operating income to measure corporate innovation, we found that:(1)the degree of online voting participation of small and medium shareholders is significantly negatively associated to corporate innovation;(2) the degree of online voting participation of minority shareholders reduces the voice of the management , weakening the management's constraint on the interests of large shareholders (3) With the improvement of the shareholding balance, the impact of online voting participation of minority shareholders on enterprise innovation decreases significantly; the more the stake of the largest shareholder , the stronger the inhibitory effect of minority shareholders' online voting participation on enterprise innovation is.

Does Heterogeneous CSR Affect Corporate Performance?

The market rivalry and China’s ongoing economic expansion are both contributing to a gradual rise in shareholder influence over businesses. Fulfilling corporate social responsibility (CSR) is becoming more and more important to improve corporate performance, gain long-term competitive advantage and achieve sustainable development. Based on panel data of 514 listed Chinese A-share companies from 2015-2019, this study applies a two-way fixed effect model to examine the effect of CSR on corporate performance from stakeholders’ perspectives. And it also examines the mediating effect played by green technological innovation and the moderating effect of two basic corporate competitive strategies on the role of CSR in corporate performance. The study’s findings indicate that: (1) the fulfillment of CSR has a significant positive impact on corporate performance. (2) Green technology innovation plays a part in mediating the process of fulfilling CSR in promoting corporate performance. Internal CSR fulfillment enhances corporate performance by boosting investment in green technology innovation, but external CSR fulfillment enhances corporate performance by decreasing investment in green technology innovation. (3) The positive effect of CSR on corporate performance is weakened by an increase in the level of low-cost strategies, while the positive relationship between CSR and corporate performance is strengthened by an increase in the level of differentiation strategies.