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Start date: 2020Subject: search.filters.subject.Corporations

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    Essays on corporate social responsibility : a thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Finance, School of Accountancy, Economics and Finance, Massey University
    (Massey University, 2025-09-18) Zhang, Xiaochi
    This thesis comprises three essays advancing the literature on workplace safety, an important component of corporate social responsibility. The first essay examines how generalist CEOs with transferable managerial skills enhance workplace safety. These executives improve safety by optimizing labor investments, reducing employee workloads, and ensuring higher information quality. The relation is more pronounced among firms facing financing constraints or intense market competition. The study also shows that workplace injuries and illnesses reduce innovation, productivity, and firm value. The second essay explores the impact of shareholder distraction on workplace safety. Distracted shareholders are linked to higher rates of work-related injuries, especially in firms with weak governance and high competition risks. Our findings suggest that reduced monitoring by distracted shareholders leads to lower safety investments, increased workloads, and greater earnings management, resulting in a poorer safety environment. The third essay investigates how the inclusion of general counsel in top management improves employee safety. Firms with general counsel in senior leadership are associated with lower injury and illness rates. The relation is more pronounced for firms with better information quality, more efficient labor investment, leadership by lawyer CEOs, weaker governance structures, and heightened agency problems. Overall, these essays provide new insights into how corporate leadership and governance influence workplace safety. The thesis offers contributions to the literature on workplace safety by addressing critical gaps in existing research. This work extends theoretical frameworks such as upper echelon theory by applying it to the domain of workplace safety. It also underscores the practical implications of aligning leadership capabilities and governance mechanisms to safeguard human capital, ultimately driving sustainable firm performance.
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    Labour market friction effect on corporate performance : evidence in the global market : a dissertation submitted in fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at Massey University, School of Economics and Finance, Massey University
    (Massey University, 2023-08-31) Bai, Hengyu
    This thesis represents the first academic endeavour to investigate the impact of labour market friction on corporate performance in a global context. In traditional neoclassical economic theory and relevant research, human capital was considered merely an input to generate economic value. Unemployed workers were assumed to fill vacant job positions perfectly, similar to interchangeable machine parts. However, as understanding has evolved, economists now recognise the complexities of filling a job vacancy, which needs to take into account the skills, geographic locations, labour preferences, and various objective factors of the labour force. Consequently, a mismatch often occurs between unemployed workers and vacant jobs, resulting in simultaneous unemployment and job vacancies. This phenomenon is termed labour market friction. This thesis comprises three subprojects, each contributing a distinct essay. The first essay examines the effect of labour market friction on expected stock returns in the Chinese stock market. Utilising the portfolio sorting approach and the Fama-MacBeth regression model, the findings indicate that firms with higher labour friction risk are likely to experience higher stock returns in the subsequent month. This suggests that labour friction risk serves as a significant risk factor in asset pricing. Additionally, the study reveals that the positive effect of labour friction on expected stock returns is more pronounced in firms with either high productivity or poor employee welfare. Furthermore, firms in regions with high levels of development are more likely affected by the labour friction risk. The second essay expands the scope from the Chinese stock market to global stock markets, including North America, Asia-Pacific, and Europe. The results reveal regional variations in the impact of labour market friction on expected stock returns. Specifically, labour friction risk has a negative association with expected stock returns in North American markets, whereas it is positively correlated in Asia-Pacific markets. The significant labour market friction effects are pronounced in different industries due to the varieties of labour market structures, where the North American markets contain a large partial of high technology companies, while the Asia-Pacific markets are dominated by numerous industrial companies. There is no significant relationship between labour friction risk and expected stock returns in European markets. The study also finds that the effect of labour friction is particularly pronounced in markets that are non-immigrant or non-English-speaking, providing higher external labour supply and mobility in such markets, which reduces firms’ recruitment pressures. The third essay centres on Corporate Social Responsibility (CSR) behaviours under the influence of labour market friction in a global setting. The results suggest that firms facing higher labour friction risks are more inclined to engage in CSR activities, even when controlling for year, industry, and region effects in the regression model. This CSR engagement is notably more prominent in markets with a higher demand for labour, characterised by a higher number of new businesses and job vacancies. These findings remain consistent across markets that encourage business creation and expansion through strong investor protection and low labour taxation policies. Markets with higher levels of advanced education have a more significant labour market friction effect on CSR decision-making as they have numerous labour-intensive firms which require a large labour force. Additionally, when labour unions have the strong bargaining power to protect the welfare of employees, firms are less inclined to conduct CSR activities due to the less function in controlling the labour market friction risk. In summary, this thesis contributes to the existing literature by providing empirical evidence of the effects of labour market friction on corporate performance and behaviours across different global markets. It demonstrates that the impact of labour market friction varies due to differing labour market policies and structures and is significantly influenced by the dynamics of labour supply and demand. The insights derived from examining labour market friction across diverse markets have critical implications for both corporate managers and policymakers seeking to mitigate the associated risks.
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    Three essays on corporate finance studies in China : a thesis presented in fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at Massey University, Palmerston North, New Zealand
    (Massey University, 2023-11-13) Yue, Shuai
    This thesis investigates three aspects of listed firms in the Chinese market. The first essay in the thesis examines the impact of state ownership on firm performance using hand collected ownership data of firms with state-private mixed ownership structures. We find a U-shaped relationship between state ownership and firm performance. At lower levels, state ownership has a negative association with firm performance, but beyond a certain threshold (e.g., 55% for ROA and 44% for Tobin's Q), state ownership becomes positively associated with firm performance. This finding indicates a trade-off between the negative effects of grabbing hand and the monitoring benefits of state owners. In addition, the introduction of strategic investors moderates the influence of state ownership on firm performance. The results show that the U-shaped impact of state ownership on firm performance diminishes after the introduction of strategic investors, implying that strategic investors may mitigate the underperformance observed around the threshold state ownership levels. The second essay focuses on the corporate information environment. It investigates the behaviour of firms with politically connected executives regarding information disclosure when subject to government inspection influences. China initiated the central environmental protection inspection in 2016. We find that while firms with politically connected executives generally exhibit lower stock price crash risk, these politically connected firms are more prone to crash risk when subject to inspection influences than firms without political connections. Further, we examine whether the inspection effect on crash risk varies based on the type of political connections developed by executives, namely achieved and ascribed political connections. Our results show that firms with executives having achieved political connections are related to higher crash risk when under government inspection influences, but no significant impact is observed for firms with executives having ascribed political connections. The final essay examines the influence of firms’ exposure to economic policy uncertainty (EPU) on environmental investment and investigates whether firm size plays a significant role in this relationship. We find that although small firms are generally associated with lower levels of environmental investment compared to large firms, there is a positive association between small firms’ EPU exposure and environmental investment, indicating that small firms are more inclined to invest in environmental initiatives when facing higher EPU exposure.
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    Essays on product market competition : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at Massey University, Palmerston North, New Zealand
    (Massey University, 2023) Zang, Suxiang
    Product market competition is a fundamental economic mechanism and a key topic in recent decades. In this thesis, we analyse competition measurement to improve the credibility of relevant analyses, and we study relation of firm market power with investor sentiment to fill the gap in current literature. Essay One and Essay Two investigate a typical measure of industry concentration, the Herfindahl-Hirschman index (HHI), which is widely used to gauge competition based on industrial organisation theories. To facilitate HHI application and improve its measuring accuracy, we review the existing HHI proxies and recommend two simple HHI measures. Our survey shows that the convenient but misleading Compustat HHI is most frequently employed by researchers, while Census HHI that contains the most complete market share information of US firms is less preferred mainly due to low publication frequency and narrow industry coverage. Other HHI proxies developed recently often require extra data with complicated computation and are only occasionally employed. Comparatively, the simple HHI measures we propose are strongly correlated with the comprehensive Census HHI and are available at high frequencies for wide industries. Further, compared with Compustat HHI, the simple HHI measures better approximate Census HHI in association with important firm characteristics, and lead to more similar results as Census HHI in empirical examinations. Essay Three explores the relation between market power and stock sensitivity to investor sentiment, on which previous studies basically keep silent. We show that firms with the weakest market power have the most susceptible returns to investor sentiment, and that return spreads between firms with high and low market power are significantly higher after optimistic sentiment than pessimistic sentiment. The return patterns across market power portfolios are more evident when sentiment is more extreme, and when sentiment later weakens than strengthens. Our baseline regressions usually show significantly positive relation between the high-minus-low market power portfolio returns and the preceding sentiment levels, which pulls through a set of robustness tests. Conclusively, our finding reveals a negative relation between market power and sentiment-driven misvaluation, consistent with the argument that market power insulates profits and reduces performance uncertainties.
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    Essays on managerial foreign experience and corporate behaviours in China : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at Massey University, Palmerston North, New Zealand
    (Massey University, 2022) Sun, Zixiong
    Managerial foreign experience is a type of resource which allows managers to think globally and act locally. This thesis contributes to the literature on how foreign experienced managers impact corporate behaviour in China, the world’s largest emerging market. The first essay examines how managers with foreign experience influence corporate risk-taking. I find that foreign experienced managers are positively associated with corporate risk-taking. This relationship only robustly exists among private firms rather than state-owned enterprises (SOEs). The excess risk-taking through foreign experienced managers is positively related to Tobin’s Q, indicating that foreign experienced managers increase firm value through value-enhancing projects, which benefits shareholders. The second essay concentrates on the relationship between managerial foreign experience and earnings quality. I find that foreign experienced managers improve corporate earnings quality, and this improvement is more pronounced in private firms. Moreover, I document that the improved earnings quality is an important mechanism for which foreign experienced managers increase stock returns and decrease agency costs. The third essay in the thesis investigates the relationship between foreign experienced managers and corporate labour investment. I find foreign experienced managers are more likely to recruit and retain high skilled employees, which in turn increases labour cost for firms in total. The positive relationship between managerial foreign experience and labour cost is significant in both SOEs and private firms. Foreign experienced managers may focus on employees’ well-being to complete political goals in SOEs while they are more likely to retain and attract high skilled employees to benefit shareholders’ value in private firms. I further document that the increased labour costs through managerial foreign experience can influence firm value positively. However, it also increases the labour stickiness cost. Overall, this thesis documents the benefits and costs of hiring foreign experienced managers in firms.
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    Essays on Shari'ah compliant equities : a dissertation presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at Massey University, Albany, New Zealand
    (Massey University, 2020) Karimov, Jamshid
    This dissertation presents three essays on Shari’ah Compliant Equities. The reported work analyses the impact of Shari’ah Compliant Requirements (SCR) on the capital structure of the firms and its effect on the cost of equity capital, payout policy and mitigation of firm-level political risk. The first study examines if the adoption of SCR affects the cost of equity capital for firms. It estimates the cost of equity capital, implied by market prices and analyst forecasts, and account for changes in growth expectations around the adoption of SCR. The results of the study show that the transitional implications of Shari’ah compliance can diverge depending on information spread. The findings reveal that getting a Shari’ah compliance certificate, initially increases the cost of equity for a firm, potentially due to higher financial constraints and other burdens associated with Shari’ah requirements. However, with greater exposure and awareness in Islamic markets, Shari’ah compliance eventually leads to a fall in the cost of equity. The industry-level, SCR adoption effects are stronger in relatively tangible sectors. Robustness analyses confirm that becoming Shari'ah-compliant increases the stock liquidity of SCR adopted firms, which co-varies negatively with the cost of equity. The second study examines if and to what extent the adoption of SCR affects the payout smoothing policy of firms. More importantly, this study aims to identify and assess a possible mechanism behind such linkage and measure the amount of fluctuations of earnings absorbed by investment, borrowings, and payout policies. Variance decomposition strategy that enables to empirically analyse the adjustments of borrowings and investment policies to comply with payout smoothing in order to buffer net income fluctuations in the environment of Shari’ah compliance is employed. Using a new approach in the literature, this chapter measures the extent of intertemporal payout smoothing across business cycles to test the permanent income hypothesis for firms. Accordingly, the impacts of temporary vs. permanent net income shocks on the payout policy of firms are distinguished. The study also, documents that even though their payout ratios are mostly independent from the year by year net income growth (temporary shocks), dividends are impacted deeply by long term net income growth (permanent shocks). Interestingly, being Shari'ah-compliant makes dividends more dependent on permanent income growth. The third study, using a novel Economic Policy Uncertainty (EPU) firm-level political risk index as a proxy for political risk and uncertainty firms face, examines the impact of firm-level risk on the cost of equity and dividend payouts policy of firms. The paper aims to shed light on the transitional implications of Shari’ah compliance on firms exposed to firm-level political risk. It analyses if the adoption of SCR mitigates the firm-level political risk and their impact on the cost of equity and dividend policy. Benchmark results show that 1% increase in the exposure of political risk contributes to a rise in its cost of equity capital by 0.2% and in dividend payout by 13%. Shari’ah compliance eventually leads to a fall in the cost of equity and a rise in dividend payouts, despite the exposure of the firm to political risk. These findings have important policy implications that are relevant to Shari’ah compliant equities and beyond.