Shareholding Ratio Research Articles

An Empirical Study on the Impact of Corporate Governance Level on Investor Confidence Under the Supply Chain Finance

With the rapid development of cloud computing and financial technology, supply chain finance gradually takes a significant role at the financial market. More investors consider that as the future trend of enterprising growth. There is no denying that boosting investor confidence is the foundation for a capital market to achieve sustainable development. Does the quality of corporate governance affect investor confidence? Based on theoretical and empirical analysis, investor confidence is affected by managerial compensation, managerial shareholding ratio, independent director ratio and board size. Moreover, in the sample of A-share listed companies in China stock market in 2017-2021, corporate governance level is constructed as a synthetical indicator by using PCA to investigate its impact on investor confidence under the supply chain finance model. The results show that the higher the corporate governance level, the stronger the investor confidence. Based on the above findings, a series of recommendations are put forward aimed at improving the government's regulatory capacity as well as corporate governance level.

Environmental, Social, and Governance Performance and Corporate Sustainable Development in China

Purpose - With the acceleration of global integration and the deepening of the market economy, sustainable development is receiving unprecedented attention worldwide. Corporate environmental, social, and governance (ESG) performance is one of the most important ways of promoting sustainable development. Companies with good ESG performance excel both operationally and financially, maintaining their competitive advantage and achieving sustainable corporate growth. This study examines the impact of ESG performance on corporate sustainability and identifies factors that influence this relationship from the perspective of external governance structures.
 Design/Methodology/Approach - This study investigates the impact of corporate ESG performance on corporate sustainability using a fixed-effects model with Chinese A-share listed companies from 2011 to 2020. It also explores the moderating roles of external audit quality, the shareholding ratio of institutional investors, and analyst attention on the impact of ESG performance on corporate sustainability.
 Findings - The findings show that corporate ESG performance can contribute to sustainable development. External audit quality, the shareholding ratio of institutional investors, and analyst attention have positive moderating effects on ESG performance, which can contribute to sustainable development.
 Research Implications - This study enriches theoretical research in ESG performance and sustainability, and identifies external governance factors that contribute to the relationship between the two. Consequently, it provides suggestions for listed company growth and sustainability practices

The Inhibition of Institutional Investor Clique on the Tunneling Behavior

The development of communication technology has accumulated a large amount of data in the field of finance, and analyzing this data can better portray the behavior of financial entities, which is crucial to the progress of corporate finance. Based on the theory of social network and the classic “prisoner’s dilemma” model, this article finds that institutional investors will cooperate to participate in the governance of the listed companies. Then, by using the Louvain algorithm, institutional investor cliques have been derived from institutional investor networks based on nonfinancial listed companies in China between 2007 and 2020. The study uncovers the inhibition effect of the institutional investor clique on the tunneling behavior of the listed companies, and the higher the shareholding ratio and centrality of the institutional investor clique, the stronger its inhibitory strength. This paper extends the concepts and methods from the field of information communication to the analysis of financial institutional investors, offering a theoretical and empirical foundation for the interdisciplinary research of network algorithms and finance.

A Study of Institutional Investors' Shareholding and Corporate Risk-Taking

This paper analyzes the relationship and impact of stress-resistant institutional investors and stress-sensitive institutional investors on institutional investors' shareholding on corporate risk-taking, using a sample of A-share listed companies in Shanghai and Shenzhen from 2011 to 2020. It was found that (1) the shareholding ratio of stress-resistant institutional investors was negatively related to the level of corporate risk-taking; (2) while the shareholding ratio of stress-sensitive institutional investors was not significantly related to the level of corporate risk-taking. Studying the impact of institutional investor shareholding on corporate risk-taking, and implementing effective measures to improve the level of corporate risk-taking will help corporates to develop healthily and the economy to grow steadily.

The influence of board governance structure on tourism enterprises resilience – based on the data of listed Chinese tourism enterprises

ABSTRACT Previous research has shown that firms’ resources and management capabilities can contribute significantly to differences in firm resilience. However, little is known about the effect of board governance structures on tourism enterprise resilience during industry crises. This study is the first to explore the effects of board governance structure on tourism firms’ resilience in the context of the COVID-19 pandemic. Thus, this study constructed an econometric model, applying ordinary least squares and two-stage least squares with instrumental variables. The model was empirically tested using data from listed Chinese tourism companies for 14 months before and after the COVID-19 outbreak. The study's findings show that board structure significantly impacts tourism enterprises’ risk resilience. The role of the board governance structure is significantly heterogeneous owing to differences in the proportion of independent directors, the shareholding ratio of directors and the dual role levels of the chairman and general manager of tourism firms. This study extends the growing tourism resilience literature by adding the important variable of board governance structure. The contribution of this study lies in providing strategic suggestions for tourism firms to enhance their resilience by adjusting their board governance structure, thereby increasing their ability to weather unexpected crisis events.

Research on the reasons for the continued decline in corporate performance:evidence from SMEs of China

Nowadays, the domestic economic situation is changing rapidly, and many small and medium-sized board listed companies have been in a state of long-term decline in performance due to the impact of the domestic and foreign economic environment and their own structure. The performance is in a state of continuous decline, which means that there are problems in the corporate governance structure and management methods. Over time, the market share of the company will decline, the competitiveness will be reduced, and the company's reputation will be affected, which is not conducive to the sustainable development of the company in the rising period. The establishment of small and medium-sized board is an important measure for the country to improve the capital market, so it is necessary to analyze and improve the related research on the performance decline of small and medium-sized board companies. This paper proposes research hypotheses on the basis of previous research. The research results show that technological innovation, executive shareholding ratio, executive compensation and enterprise size have a negative impact on the continuous decline of performance, fixed assets are positively related to the continuous decline of performance, and there is no significant correlation between costs and corporate performance. Finally, on the basis of theoretical analysis and empirical test, some suggestions are put forward to effectively avoid the continuous decline of performance and improve the performance of enterprises.

The Comparison and Analysis of Exchange Traded Funds (ETFs) Return Rates

Abstract Based on the trading data of A-share listed companies held by ETFs and the shareholding data of exchange-traded funds during 2011-2022 in China stocks markets, this paper uses the dynamic panel differential GMM model to study the shareholding ratio of exchange-traded funds and the impact of its changes on the liquidity of the underlying stocks. First, all the samples were regression and empirical results were analyzed. Then, the main board of Shanghai and Shenzhen, small and medium-sized board and growth enterprise board stocks were respectively regression to draw conclusions, and the robustness of the above research was tested. In the end, two main conclusions are drawn from the above research: (1) There is a significant positive correlation between the shareholding ratio of ETFs and stock liquidity, that is, the higher the shareholding ratio of ETFs, the higher stock liquidity. (2) The positive change of ETFs shareholding ratio will significantly increase the liquidity of the underlying listed companies' stocks. JEL classification numbers: G11. Keywords: Exchange-traded fund, Rate of return, Research and analysis.

Will R&D make investors more tolerant? Analysis based on the performance forecast of Chinese listed companies.

In the era of innovation dividends, whether investors, as the main participants in the capital market, can tolerate enterprise innovation activities is the key to whether the capital market can help enterprises innovate. This paper takes the listed companies of Shanghai and Shenzhen A-shares in China that disclosed quantitative performance forecasts from 2016 to 2021 as samples, obtains the market reaction of performance forecasts through the event study method and uses them as proxy variables of investors' short-term performance expectations, and uses multiple regression analysis to explore the impact of corporate R&D on investors' short-term performance expectations. The results are as follows: (1) corporate R&D investment significantly reduces investors' short-term performance expectations (that is, investors have a significant tolerance effect on enterprises with higher R&D investment); (2) the increase in the shareholding ratio of institutional investors weakens the tolerance effect; and (3) with the implementation of China's innovation-driven strategy, the tolerance effect of its capital market on enterprise R&D gradually increases, especially for high-tech companies, but has a low tolerance effect on state-owned companies' R&D risk. The results show that investors in China's capital market are not completely rational in their response to corporate R&D, and investors are willing to bear more short-term performance losses for high R&D investment, which is consistent with prospect theory.

The impact of carbon emission reduction inputs of power generation enterprises on the cost of equity capital.

This paper aims to encourage power generation enterprises to actively carry out emission reduction activities by studying the impact of carbon emission reduction investment on long-term development. The existing literature mainly studies the interaction between national economic development and energy consumption at the macro level, and the impact of environmental protection investment by enterprises at the micro level on the short- and long-term economic consequences. However, there is still a large space for research on how specific emission reduction measures lead the long-term development of enterprises. Therefore, this paper chooses to introduce enterprise competitiveness, government subsidy, and management shareholding ratio respectively to conduct intermediary test and grouping regression, and empirically studies the mechanism of carbon emission reduction input of Chinese power generation enterprises on the cost of equity capital from 2013 to 2020. The results show that management shareholding can enhance the initiative of enterprises to reduce emissions. At the same time, carbon emission reduction investment can effectively reduce the cost of equity capital by improving the competitiveness of enterprises and forming a reputation mechanism faster. This study reveals the significance of carbon emission reduction investment as an important part of enterprise environmental protection investment, and emphasizes that the government and enterprises can effectively avoid the short-sighted tendency of enterprises and improve the long-term development power of enterprises by adjusting government subsidies, management shareholding ratio and other policies.

Research on the influence of executive power distribution on R&D investment of listed companies

The power distribution of senior executives will have an important impact on the R&D investment of enterprises. Based on the data of A-share listed companies from 2009 to 2019, this paper takes an A-share listed company as the research object, and discusses the impact of the size of executive power on enterprise R&D investment from the perspective of the distribution of executive power. The study found that there is a significant positive correlation between executive power and enterprise R&D investment, that is, the greater executive power is, the more likely it is to bring more R&D investment to enterprises. At the same time, it is found that compared with state-owned enterprises and listed companies with small scale, poor profitability, high equity concentration and low institutional shareholding ratio, the distribution of executive power has a more significant impact on enterprise R&D investment. In addition, the study also found that industry characteristics also have a certain degree of impact on the relationship between the distribution of executive rights and enterprise R&D investment.

Financing strategy of transnational supply chain with vertical shareholding under tax system difference: Creditor or guarantor?

Economic globalization enhances the international effect of income tax collection, which significantly impacts the taxable income and cash flow management of a transnational supply chain. This study investigates the financing preferences of the buyer and supplier in a transnational supply chain with vertical shareholding under tax symmetry and asymmetry. The buyer can act as a creditor to provide early payment financing or as a guarantor to help the supplier obtain a low-interest loan. We construct Stackelberg game models to determine the buyer’s and supplier’s equilibrium decisions and profits in two financing strategies under different tax systems. The results indicate that the buyer and supplier have inconsistent financing preferences when the supplier cannot borrow directly from the bank. The buyer always prefers to be a creditor, whereas the supplier’s financing preference depends on the trade-off between the sales revenue, production cost, financing interest, tax cost, and dividends. Surprisingly, we find an optimal shareholding ratio interval related to tax rates that can eliminate double marginalization under tax symmetry, and the supply chain can be more profitable than that under centralized decision-making. However, double marginalization cannot be eliminated under tax asymmetry. The results suggest management implications for the financing strategy choice and operational decisions of a transnational supply chain with vertical shareholding.

Digital Finance and High-Quality Development of State-Owned Enterprises—A Financing Constraints Perspective

The report of the 20th National Congress pointed out that high-quality development is the primary task of building a modern socialist country in an overall sense. Based on the background of high-quality economic development in the new era, this document studies the influence mechanism between digital finance and high-quality development of state-owned enterprises based on total factor productivity (TFP) by taking A-share state-owned listed companies on the Shanghai and Shenzhen stock exchanges from 2015 to 2020 as samples. The findings are as follows: Digital finance promotes the high-quality development of state-owned enterprises by alleviating financing constraints; grouping regression shows that digital finance has a stronger driving effect on the high-quality development of large state-owned enterprises and enterprises with a high technical level. The threshold regression model shows that digital finance has a single threshold effect on the high-quality development of state-owned enterprises. Further research shows that the higher the development level of supply chain finance, the stronger the influence of digital finance on the high-quality development of state-owned enterprises through financing constraints. The higher the shareholding ratio of institutional investors, the stronger the mediating effect of financing constraints. The research results of this paper not only enrich the research on the factors that influence the high-quality development of state-owned enterprises but also provide support for the government to formulate high-quality development policies for enterprises.

Can minority investor activism promote corporate risk-taking? Evidence from a quasi-natural experiment in China

In this study, we investigate the potential of minority investor activism to alleviate risk-related agency problems. We focus on the China Securities Investor Services Centre (CSISC), a not-for-profit minority investor promoted by the China Securities Regulatory Commission to protect the interests of minority investors. Taking the popularity of the CSISC as a quasi-natural experiment, we find that CSISC shareholding significantly promotes corporate risk-taking. We also find that this positive effect is more pronounced when the controlling shareholder has a lower shareholding ratio or the counterbalancing force of other shareholders is larger. Large cash holdings and financial capacity, fierce market competition, and being in a non-high-tech industry also strengthen the role of the CSISC. Further, our analysis of the economic consequences of CSISC shareholding demonstrates that it can improve investment efficiency, constrain insiders' tunnelling activities, and improve information quality. Overall, the results shed light on the effectiveness of the CSISC in increasing investor activism and restraining insiders' risk aversion. As such, our findings have policy implications for the protection of minority investors.

소유구조와 ESG등급이 투자효율성에 미치는 영향

This study investigated the effects of ownership structure and ESG performance on investment efficiency. The variable of investment efficiency was measured based on the research results of Biddle et al.(2009), and the study period was from 2013 to 2021. The results of the study are as follows.
 First, as a result of empirical analysis of the effect of ownership structure on investment efficiency, the foreign ownership ratio has a positive effect on investment efficiency, and the ratio of largest shareholders also has a positive effect on investment efficiency. It was found that ownership structure had a positive effect on investment efficiency.
 Second, as a result of empirical analysis of the effect of ESG performance on investment efficiency, it was confirmed that E performance had a positive effect on investment efficiency, and that 'G' grade also had a positive effect on investment efficiency. However, the 'S' grade did not appear significantly, but when viewed individually, the S grade also appeared to have a positive effect on investment efficiency. Third, as a result of empirical analysis of the effect of the interaction effect of ownership structure and ESG rating on investment efficiency, it was found that the interaction effect between foreign ownership ratio and ‘E’ rating had a positive effect on investment efficiency. Next, it was found that the interaction effect between the largest shareholding ratio and the grade ‘E’ also had a positive effect on investment efficiency. However, it was found that the interaction effect between the major shareholding ratio and the 'S' grade had a negative effect on investment efficiency.
 The implications of this study are that the interaction effect of ownership structure and ESG performance, which are major variables affecting investment decision-making, was verified, and it is meaningful in that it can provide external information users with a direction in making investment decisions.

Environmental Regulation, Family Involvement and Green Innovation Efficiency—Based on Sew Theory Framework

The green innovation of family enterprises under environmental regulation is essentially the balance between emotional benefits and emotional costs, which manifests as the reputation incentive and risk aversion, respectively. The reputation incentive refers to inheriting extended social–emotional wealth, and risk aversion means maintaining constrained social–emotional wealth. Based on the theoretical framework of social–emotional wealth, this paper selects 3006 family enterprises in China from 2015 to 2020, establishes a panel model of fixed effects, and discusses the impact of environmental regulation on the green innovation efficiency in family enterprises from the perspective of family involvement. The findings indicate that command-based environmental regulation promotes green innovation efficiency in family enterprises, while market-based environmental regulation inhibits the green innovation efficiency of family enterprises. The involvement of family ownership strengthens the positive effect of command-based environmental regulation on green innovation efficiency, while the involvement of family management rights strengthens the negative effect of market-based environmental regulation on green innovation efficiency. Through mechanism analysis, it is found that command-based environmental regulation promotes green innovation efficiency in family enterprises through reputation incentives, while market-based environmental regulation reduces the green innovation efficiency of family enterprises by avoiding risks. Further analysis shows that high-competition and high-pollution industries are more significantly affected by the relationship between them. Therefore, this paper proposes improvements to green innovation efficiency in family enterprises based on the adjustment of four aspects: improving the risk management level, consolidating family control, increasing the shareholding ratio of nonfamily shareholders, and giving full play to the role of reputation incentives to achieve the sustainable development of family enterprises. Furthermore, we strive to contribute to the realization of the dual carbon goals and the United Nations Sustainable Development Goals (SDGs).

Former CEO director and executive-employee pay gap

This study investigates the influence of former CEO directors on the executive-employee pay gap. We find that former CEO directors significantly increase the executive-employee pay gap. This effect is more pronounced in non-state-owned companies, companies in less competitive product markets, weaker corporate supervision environments, and with lower shareholding ratios of majority shareholders. Further evidence shows that only when former CEOs serve as the chairman of the board can they have a direct influence on the executive-employee pay gap; the former CEO director focuses only on executive compensation but not on employee compensation. Finally, we find that the pay gap occasioned by the former CEO director has a negative impact on the future accounting performance of the company.

Status, trends and enlightenment of global oil and gas development in 2021

By analyzing the distribution of global oil and gas fields and the reasons why some oil and gas fields are not in production, the distribution characteristics of oil and gas remaining recoverable reserves and their year-on-year changes, the distribution characteristics of oil and gas production and their year-on-year changes, and the development potential of oil and gas to be tapped in 2021, this paper sorts out systematically the current status and characteristics of global oil and gas development, summaries the major trends of global oil and gas development, puts forward enlightenment for international oil and gas cooperation. In 2021, oil and gas fields were widely distributed, the number of non-producing oil and gas fields was large; the whole oil and gas remaining recoverable reserves declined slightly, unconventional oil and gas remaining recoverable reserves dropped significantly; the overall oil and gas production continuously increased, the outputs of key resource-host countries kept year-on-year growth; undeveloped oilfields had abundant reserves and great development potential. Combined with global oil and gas geopolitics, oil and gas industry development trends, oil and gas investment intensity, and the tracking and judgment of hotspot fields, the major trends of global oil and gas development in 2021 are summarized. On this basis, the four aspects of enlightenment and suggestions for international oil and gas cooperation and development strategies are put forward: attach great importance to the obligation of marine abandonment to ensure high-quality and long-term benefit development of offshore oil and gas; adhere to the principle of not going to dangerous and chaotic places, strengthen the concentration of oil and gas assets, and establish multi stable supply bases; based on the multi-scenario demand of natural gas, realize the transformation from integrated collaboration to full oil and gas industry chain development; increase the acquisition of high-quality large-scale assets, and pay attention to the continuous optimization of the shareholding ratio of projects at different stages.

The Efficiency of Green Technology Innovation and Its Influencing Factors in Wastewater Treatment Companies

To achieve the harmonious development of economic growth and the environment, nations must pay more attention to wastewater treatment and boost efficiency using green technology. This study applies the Malmquist-DEA model to assess the efficiency of green technology innovation in 19 Chinese wastewater treatment companies between 2017 and 2020. In addition, focus is placed on the core wastewater treatment technology of the companies with excellent performance, indicating how wastewater treatment companies may improve their green technology. The results of the study indicate that, first, the overall effectiveness of green technology innovation in companies follows a rising and then decreasing trend. In 2020, wastewater treatment companies’ green technology innovation efficiency was around 17.4 percent lower than in 2017. Improving technical progress is the key to boosting the total factor productivity of wastewater treatment companies. Second, based on the Tobit regression, the shareholding ratio of companies has a positive influence on the technical efficiency of companies. Therefore, China should increase innovation capacity and productivity, adopt current sewage treatment technology from overseas, and thus gradually achieve clean sewage utilization and ecological environment management.

Market reactions to proxy advisory companies’ recommendations in Japan

This study investigates how proxy advisory companies’ recommendations affect the stock prices of target companies in Japan, whose governance system has been under transition from relationship-based to more market-based. Based on 125 voting recommendations reported in newspapers between 2003 and 2022, we find that stock prices respond to recommendations inconsistent with the board's policy more largely than to those consistent. The market reactions become larger when firms are smaller and/or have a higher shareholding ratio of foreign investors, when recommendations are against takeover defense measures, and when the firms’ name attracts investor attention.

Does the Prohibition of Long‐lived Asset Impairment Reversals Affect Corporate Innovation? Evidence from a Quasi‐experiment in China

China modified the asset impairment standard in 2007, prohibiting long‐lived asset impairment reversal, which it had previously allowed. Using this setting as a quasi‐experiment, we investigate how the prohibition of long‐lived asset impairment reversal affects corporate technological innovation. Our empirical results demonstrate that the prohibition of impairment reversal has negative impacts on corporate innovation outputs. Further analyses reveal that the negative effect of this prohibition on corporate innovation is more prominent in companies with high discretionary accruals, high shareholding ratios for the largest shareholders, and companies in highly competitive markets.