Managerial Share Ownership Research Articles

Impact of board characteristics on firm green, sustainability and competitiveness performances

This explores the association between corporate governance mechanisms and firm green, sustainability and competitiveness performances in the Philippines. To evaluate the association between board characteristics and firm green, sustainability and competitiveness performances, a two-step system generalized method of moments (GMM) was utilized. Board size, board independence, CEO duality, management shareholding, and multiple directorships are the characteristics examined. Firm green, sustainability and competitiveness performances is measured using indicators such as return on assets (ROA) and Tobin’s Q ratio. Outcomes denote that board size, multiple directorships, and leverage have negative statistical relationships with firm green, sustainability and competitiveness performances using ROA as a financial measure. Moreover, firm size has a positive statistical relationship with ROA. This accords with the recent literature on corporate governance mechanisms. Enigmatically firm size has negative and statistical relation with firm green, sustainability and competitiveness performances using Tobin’s Q ratio as a measure of financial performance. Leverage has also been found to be positively related to firm performance. The consequence of this study clamps significant implications for practitioners and policymakers in developing countries, specifically in the Philippines. This will postulate insights into the crucial role of corporate governance practices in improving the green, sustainability and competitiveness performances of firms and accentuate the necessity to establish and enforce strong corporate governance mechanisms and regulations.

A Study on the Role of Compensation Incentives and Equity Incentives in Technology-based Enterprises

Technology-based enterprises, driven by innovation, have flourished in the economic market in recent years. For technology-based enterprises, how to effectively motivate employees to unleash their innovation drive and thus improve corporate performance is a key focus of management in technology-based enterprises. Pay incentives and equity incentives have been widely used in enterprise personnel management in recent years, and previous scholars generally believe that these two approaches can be more effective in motivating employees to innovate and establish a sense of ownership. In order to better study the shortcomings of salary and equity incentives in innovative companies and the strategies to solve them, this paper summarizes the relevant studies and uses Huawei and Hikvision, which have excellent incentive policies, as examples, to find and point out that the level of managerial shareholding and salary level are the criteria for incentives and should be limited to a reasonable range. Secondly, different incentive methods should be used at different stages to optimize the incentive effect.

Mediation path study on the effect of venture capital support on firm's corporate social responsibility

PurposeThis study examined the influence of corporate governance (CG) in relation to venture capital (VC) investment on invested firm's corporate social responsibility (CSR) performance in the Chinese context. More specifically, this paper examined the mediation of the proportion of independent directors (INDD), management shareholding (MSH) and executives' political connections (POLC) in the above-mentioned relationship.Design/methodology/approachThis empirical study performed multiple mediation testing and bootstrap mediation robustness test on data from Chinese A-class shares IPO companies between 2010 and 2018.FindingsThe results of direct relationship analysis showed that VC support is detrimental to firm' CSR performance, consistent with previous research studies. The indirect effect analysis showed that VC reduced firm' CSR through reduction of INDD on board and increased MSH. Conversely, VC contributed to firm's CSR through higher POLC, which confirmed the significance of the joint mediation model.Practical implicationsThis study offers stakeholders the opportunity to develop a deeper understanding of the role of VC institutions, independent directors and executives, in terms of firm's CSR, as well as provides insights on control rights allocation and policy drafting on independent directors when considering accessing VC support.Originality/valueBy analyzing the mediation model of the VC–CSR relationship, this paper provides evidence to enrich the debate on the role of CG in the relation between VC and firm's CSR.

Benefit synergy or “fishing in troubled waters”? Economic policy uncertainty and executive perquisite consumption

PurposeEconomic policy uncertainty (EPU) has huge impact and harm on real economy, so the economic logic and other economic effects behind this must be further studied. By constructing the “China Economic Policy Uncertainty Index” to capture the degree of EPU faced by Chinese companies, the authors empirically test whether and how EPU affects the level of executives' perquisite consumption.Design/methodology/approachThis study investigates the relationship between EPU and executive perquisite consumption based on a sample of 3,185 publicly listed firms in China. To examine the relationship between EPU and executives' perquisite consumption, a mixed least squares method was used for regression. To alleviate the problem of missing variables that do not change over time and control the influence of unobservable individual heterogeneity at the firm level, the firm fixed effects model is used for regression.FindingsThe study finds that EPU is positively associated with executive perquisite consumption. This positive association is stronger for firms with smaller size, lower management shareholding and higher levels of separation of ownership and control. Effective external governance (i.e., analyst coverage, media coverage, auditor and market competition) can mitigate the relationship between EPU and executive perquisite consumption. Further analysis reveals that EPU increases executive perquisite consumption by holding more cash and decreasing firm risk taking. EPU hurts market value of firms by boosting executive perquisite consumption and tunneling.Practical implicationsIn an environment with high EPU, the board of directors should reduce managers' compensation performance sensitivity to ease the agency conflict caused by uncertainty. Firms should improve their governance mechanisms and standard and pay attention to their environmental changes. Policymakers should pay attention to maintaining the continuity and predictability of policies, stabilizing the economic policy expectations of market entities and avoiding frequent changes in policies that can harm economic and firm value. The regulatory authorities should actively guide listed companies to increase active information disclosure during periods of high policy uncertainty.Originality/valueThis study contributes to the research on corporate governance by showing how EPU influences executives' behaviors. The authors advance relative studies by showing that this uncertainty embedded in a firm's external environments influences executive perquisite consumption. This study also contributes to the literature on how internal and external governances influence corporate behavior during uncertainty. These findings extend this line of research by suggesting that effective external governance is an attribute that can alleviate the effect of uncertainty on managers' opportunistic behaviors.

Manufacturing Companies :The Effect of Liquidity and Corporate Governance on Financial Performance with Firm Size as a Moderating

Financial performance is important to see the level of achievement of predetermined targets, as material for evaluation, and policies that must be taken by management. The influence of liquidity and good corporate governance through the mechanism of ownership structure towards the financial performance of Manufacture Company listed on the IDX in 2020-2021 with firm size as moderating variable are the aim of this research. This type of research is quantitative research with secondary data. The purposive sampling method was used for research sampling and obtained 87 companies. Moderate regression analysis (MRA) is used to be analysis technique in this research. This research get results that liquidity has a significant positive effect on financial performance, but institutional and managerial ownership have not effect on financial performance because companies whose ownership structure is dominated by institutional investors actually get a poor response from the market and the company's managerial shareholding has not been able to align the interests of shareholders outside of management, and then firm size can’t moderate the relationship of liquidity, institutional and managerial ownership to financial performance because the size of the company is not so much noticed by interested parties in the company.

Analisis Faktor-faktor yang Mempengaruhi Pengungkapan Tanggung Jawab Sosial Perusahaan Pada Perusahaan yang Terdaftar di Bursa Efek Indonesia

This 
 study aims to analyze and determine the factors that influence the disclosure of corporate social responsibility. The independent variables in this study are public share ownership, managerial share ownership, foreign share ownership, size of the board of directors, size of audit committee and size of the female board of directors. The control variables in this study are firm size, firm age, leverage and profitability. The dependent variable in this study is the disclosure of corporate social responsibility with the GRI-G4 proxy. The population in this study are all companies that disclose corporate social responsibility listed on the Indonesia Stock Exchange (IDX) through the Indonesia Stock Exchange website (www.idx.co.id) in 2016-2020.
 Sampling using purposive sampling method as many as 497 companies. Data analysis began with descriptive statistical tests, then continued with panel regression analysis and hypotheses through the E-Views application.
 The result of this study indicate that public share ownership, managerial share ownership, audit committee size, the size of the female board of directors, firm size and firm age have a significant positive effect on disclosure of corporate social responsibility, profitability has a significant negative effect on disclosure of corporate social responsibility, while foreign share ownership, board of directors size and leverage have no effect on the disclosure of corporate social responsibility.

The influence of corporate governance and shareholding structure on corporate social responsibility: The key role of executive compensation

AbstractThis paper aims to contribute to the extant literature on corporate social responsibility and corporate governance by empirically examining the effect of firm governance and shareholding structure (and their interaction) on corporate social responsibility performance. Our study is conducted within a unique context of improving social responsibility policies, regulations, and management. In particular, we examine how corporate governance practices and both outside (institutional and pension) and inside (managerial) shareholdings impact corporate social responsibility activities. Using one of the largest UK data sets to date, consisting of FTSE 350 nonfinancial listed firms for the period from 2002 to 2016, our results provide evidence that corporate governance has a positive impact on corporate social responsibility. Institutional (indicating strong monitoring role) and managerial (proxy for alignment of interests between insiders and outsiders) shareholdings are negatively associated with corporate social responsibility performance. Our additional analyses provide empirical evidence that compensation structure, as a corporate governance tool, aligns management decisions toward engaging in corporate social responsibility activities and corporate strategic sustainable objectives. Additionally, our results suggest a substitutive relationship of institutional shareholding with corporate governance practices. There is a complementary relationship of managerial shareholding with corporate governance practices in influencing corporate social responsibility. Our evidence is robust after controlling for entrenched managerial shareholding, 2SLS and alternative measures of corporate social responsibility performance. The findings provide empirical support for the UK Corporate Governance Code's emphasis on designing effective remuneration policies and practices.

PENGARUH STRUKTUR KEPEMILIKAN TERHADAP PENGUNGKAPAN CORPORATE SOCIAL REPONSIBILITY PADA PERUSAHAAN HIGH PROFILE DI BEI

This research was conducted to see the effect, of foreign share ownership, managerial share ownership, and institutional share ownership, on Corporate Social Responsibility (CSR) disclosure. This research is a quantitative descriptive research method using secondary data. Determination of the sample using the purposive sampling method in order to obtain a sample of 35 samples from 110 companies. Analysis of the data used is a multiple linear regression analysis using the IBM SPSS Statistic 16 application. The results of this study indicate that foreign share ownership has no effect on Corporate Social Responsibility (CSR) disclosures with a significant value of 0.650, managerial stock ownership has an effect on Corporate Social Responsibility (CSR) disclosures with a significant value of 0.047, institutional share ownership has an effect on corporate social disclosures. Responsibility (CSR) with a significant value of 0.010. Simultaneously foreign share ownership, managerial share ownership, and institutional share ownership have a significant effect on the disclosure of Corporate Social Responsibility (CSR) with a significant value of 0.002.

The Effect of Corporate Governance and Company Size on Tax Avoidance

Purpose – This study aims to examine the effect of corporate governance and company size on tax avoidance in manufacturing companies.
 Methodology – The population includes all the manufacturing companies listed on the Indonesia Stock Exchange during 2017-2019 and the 288 companies used as samples were selected through the purposive sampling method. A regression model was used for analysis.
 Findings – The results showed that institutional ownership, independent commissioners, and audit committee did not affect tax avoidance but managerial ownership and firm size have some influence. It was recommended that companies improve good governance by reducing their tax avoidance policies while other variables such as audit quality, executive character, liquidity, accounting conservatism, and capital intensity are suggested to be added to further studies related to tax avoidance.
 Originality – The novelty of this study is examine all corporate governance mechanisms consist of institutional ownership, independent commissioner, audit committee, and managerial share ownership on tax avoidance.

Multi-Factor Collaborative Governance of Controlling Shareholder Expropriation Behavior in Emerging Economies: A Perspective of Double Principal-Agent Conflicts

Controlling shareholder expropriation is an important issue in corporate governance in emerging economies. The existing literature discusses the effects of minority shareholder legal protection, controlling shareholder ownership, and managerial shareholding on controlling shareholder expropriation, which is mainly empirical research with insufficient attention to the internal relationships among the governance factors. This research builds theoretical models to study the interactive mechanisms between minority shareholder legal protection, controlling shareholders’ initial shareholding ratios, managerial shareholding, controlling shareholder expropriation, and management effort. Furthermore, setting reasonable ranges for parameters, we use MATLAB to conduct numerical simulations and expand the detailed analyses to quantitatively reveal the degrees of influence of the governance factors. Our results show that controlling shareholder expropriation is negatively related to the degree of minority shareholder legal protection and controlling shareholders’ initial shareholding ratios, while the optimal managerial shareholding ratio is positively related to the degree of minority shareholder legal protection and controlling shareholders’ initial shareholding ratios. The findings enrich the literature on the governance of controlling shareholder expropriation and provide new approaches to and theoretical explanations for the governance of controlling shareholder expropriation toward sustainability in emerging economies.

Can the Market Recognize the Value of the Corporate Governance Mechanism of Chinese Listed Companies?-Empirical Evidence From COVID-19.

This paper studies whether the market can recognize the value of corporate governance mechanisms (ownership structure, board structure, and managerial incentives) of Chinese listed companies. We find that when companies are faced with “black swan” events, such as COVID-19, non-state-owned enterprise are found to be more valuable, that is, the stock price of non-state-owned enterprises are more immune to the negative shocks of COVID-19. For board structure, the arrangement of the duality of chairman and CEO is found to be more valuable and can effectively alleviate the negative shocks of the epidemic on the stock price. For managerial incentives mechanisms, it shows that management shareholding, management compensation, and executive stock options are all effective mechanisms and can better withstand the negative shocks of the COVID-19 epidemic on the stock price of companies. This paper sheds light on the value of corporate governance mechanisms in the Chinese capital market from the perspective of investors, which enriches literature in the field of corporate governance.

Social trust, corporate governance, and stock price crash risk: Evidence from China

AbstractWe empirically examine the relationship between social trust and stock price crash risk using data for Chinese listed companies from 2003 to 2016. Social trust reduces concealing of bad news by managers, thereby lowering stock price crash risk. We also explore the interaction between social trust and other corporate governance mechanisms, including incentive and monitoring mechanisms, and its effect on stock price crash risk. We find that the effect of social trust is more pronounced in firms with little managerial shareholding and a small proportion of independent directors, indicating that social trust strengthens corporate governance when other internal mechanisms are weak.

The Effect of Ownership Structure and Iso 14001 Certification on Corporate Social Responsibility Disclosure with Company Size as A Moderating Variable

The Effect of Ownership Structure and Iso 14001 Certification on Corporate Social Responsibility Disclosure with Company Size as A Moderating Variable

Innovation input incentive policy and financialisation of entity enterprises: Evidence from the policy of additional deduction for R&D expenses

In the structure of business investment, the tendency of entity enterprises to financialise profoundly affects their incentive to invest in innovation. The question of whether and how innovation investment incentive policies can facilitate firms to adjust their investment capital structure more in favour of R&D innovation deserves attention. This paper empirically examines the impact and mechanism of innovation investment incentive policies on the investment structure of enterprises based on micro-operating data of listed A-share enterprises from 2009 to 2020, taking the R&D expense-plus deduction policy as an example. The study finds that: firstly, the R&D expense-plus-deduction policy significantly promotes firms' investment structure demand for engaging in R&D investment; secondly, its main mechanism comes from the reduced financialisation of entity enterprises, which further increases R&D investment under the incentive of strengthening firms' market capitalisation management capital and the level of risk-taking of firms; thirdly, the policy effect is subject to the effects of firm size, gearing, return on total assets, the nature of firm ownership, management shareholding shares, and firm age. The findings suggest that the innovation investment incentive policy promotes a more biased investment structure of firms towards R&D innovation and achieves the desired objectives of the policy.

Corporate Diversification, Managerial Shareholding and Accrual-Based Earnings Management: Evidence from Nigeria

Abstract Previous studies hold that information asymmetry and offsetting accrual hypotheses explain the role of diversification in earnings management. Our paper adds to this line of research by examining the effect of corporate diversification on earnings management and investigating whether managerial shareholding matters in the relationship between diversification and earnings management in the context of an emerging economy. The study used a sample of 45 companies listed on the Nigerian Stock Exchange from 2008 to 2018 and the Generalized Least Square (GLS) regression technique. The results revealed that industrial and geographical diversification have significant positive effects on earnings management. The result also showed that managerial shareholding has a significant negative moderating effect on the relationship between industrial diversification and earnings management. These findings suggest the need for regulators to encourage managerial shareholding in diversified firms through share-based remuneration to have more reliable earnings.

Corporate Governance Attributes and Accounting Conservatism: Evidence from China

Abstract The paper explores the association between corporate governance attributes and the extent of accounting conservatism apparent in Chinese listed companies’ financial reporting. The findings demonstrate that significant positive association exists between board independence, board size and accounting conservatism in Chinese information technology companies. Conversely, CEO duality, management shareholding and the shareholding ratio of the largest shareholder significantly negatively correlated with accounting conservatism. To the best of the author’s knowledge, this is one of the first empirical papers revealing the evidence on the relationship between corporate governance attributes and accounting conservatism in China. Overall, the author’s findings match up with the assertion that accounting conservatism assists directors in reducing agency costs of firms.

Stakeholder Management, Cooperatives, and Selfish-Individualism

Abstract We analyze stakeholder management (STM) relative to cooperation and individualism within the fourth industrial revolution (FIR). STM is a recent corporate governance tool boosting cooperation and allowing representativeness of individualistic behaviors even in dialectical environments. Though forerunning it, cooperatives massively use STM now, while the FIR demands cooperation also at non-cooperative enterprises. We reach two main conclusions. Deeper orientation towards STM helps solve the shareholder management (SHM) crisis. Moreover, exemplifying the benefits of STM towards social and environmental goals, cooperatives can inspire also other companies aiming to reduce the negative externalities of SHM and profit from cooperation within the FIR.

Ownership structure and loan quality of deposit money banks in Nigeria

Purpose - This study examined the effect of Ownership Structure (Management Shareholding and Ownership Concentration) on the loan quality (LDR) of banks in Nigeria for a period of 10 years (2008-2017). The study utilized data extracted from the annual reports of the fourteen (14) studied banks.Method - Robustness tests were carried out to determine: the existence or otherwise of multi-collinearity, fitness of the model and appropriate regression analysis for the study. Descriptive statistics, correlation and Fixed Effect GLS regression were used to describe and analyze the data.Result - The study found that, ownership structure (ownership concentration and management shareholding) has significant negative effect on loan quality of banks in Nigeria.Implication - The implications of this research is that increased ownership concentration as well as management shareholding can strengthen banks’ loan quality owing to reduced proportion of depositors funds used to finance loan. This could spur confidence in the bank by the general public with regards to the safety of their deposits.Originality - This study is different from other studies that concentrated on the use of ownership structure in relations to various financial performance measurements such as ROA, ROE, NPM among other. In this study, effort was made to consider the financial health of banks owing to the nature of their business (loan).

Ownership Structure and Its Impact on Dividend Policy: A Case of Non–Financial Companies in Pakistan

This article focus on one of important corporate decision that can have a great impact on the sentiments of the investor’s i.e. corporate dividend policy. This study investigates the determinants of the corporate dividend policy in the context of agency relation. The analysis of the study has based on the random sample of eighty firms from the listed companies in Pakistan, for the period of eight years ranging from 2003 to 2012. Stepwise multiple regressions have used to investigate for the relationship of ownership variables with the dividend payouts. The empirical results suggested that there has a negative relationship between the dividend payouts and managerial share ownership and thus these are alternative tools that can be used to minimize the agency problem. And also where there has positive relationship between the institutional suggested that the higher has their shareholdings the higher will be the firm dividend payouts that will leads to less availability of the cash flows with the opportunities managers to expropriate the shareholders wealth.

Decomposition of Managerial Shareholding: Role of Monetary Incentives and Control Rights in Financial Misreporting

Previous research indicates a non-monotonic effect of managerial shareholding on various issues, such as firm value, earnings quality, and debt costs. These studies tend to explain non-linearity in terms of convergence of interests and managerial entrenchment, and use non-linear specifications of managerial shareholding, such as piecewise variables, to capture the countervailing effects. However, such research has been criticized for its arbitrary construction of piecewise variables. This study examines the link between managerial shareholding and misreporting by disentangling shareholding into monetary incentives and control rights, captured using CEO stock delta and voting premium, respectively. Consistent with alignment of interests and managerial entrenchment, it provides consistent evidence that CEOs’ monetary incentives regarding shareholding are negatively associated, whereas CEOs’ voting rights are positively associated with a propensity to misreport. Further analysis indicates that managerial entrenchment arises because owner-CEOs create more favorable conditions for misreporting via the board selection process. Overall, the findings confirm the well-known non-monotonic effect of managerial shareholding with new evidence and additional insights. In particular, the results provide greater assurance of non-linearity in managerial shareholding by revealing its underlying mechanisms without using conventional piecewise variables.