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Subject: search.filters.subject.350701 Corporate governance

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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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    Three essays on the consequences of migrant top management team : evidence from China : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Accountancy at Massey University, Auckland, New Zealand
    (Massey University, 2025-10-02) Liu, Ying
    This research investigates the consequences of migrant top management teams (TMT) using data of Chinese A-share listed firms. While the macroeconomics literature documents migration as a driving force in boosting a country’s economy, the understanding on how migration shapes corporate outcomes is still limited. Understanding the corporate outcomes of migrant TMT provides insights into how human capital movement shapes corporate governance and decision-making. This has important implications for firms to develop a more effective corporate governance system and for policymakers to strengthen formal institutions. This study is structured into three essays: (i) the association between migrant TMT and corporate innovation; (ii) the association between migrant TMT and insider trading profitability; (iii) the association between migrant CEO and audit fees. Essay One explores the association between migrant TMT defined as TMT comprised of one or more migrant managers and corporate innovation. Using hand-collected data for a sample of Chinese A-share listed firms spanning the period 2008-2020, I find a positive and significant association between a migrant TMT and corporate innovation including green innovation. My results remain robust to a set of endogeneity tests, including firm-fixed effects regression, entropy-balanced regression, and instrument variable regression. I then show that real earnings management and risk-taking are the channels through which the positive relationship between migrant TMTs and corporate innovation manifests itself: migrant TMTs engage less in real earnings management and are more likely to take risks. Finally, I find that the positive relationship between migrant TMTs and corporate innovation is more pronounced in state-owned firms, and remains significant in both high- and low-cultural diversity regions, suggesting that the observed effect is not primarily driven by cultural adaptability, but reflects a robust migration-driven mechanism. My findings contribute to the literature by providing novel evidence on how a migrant TMT affects corporate decision-making. In Essay Two, I examine the association between migrant TMT and insider trading profitability. Using a large sample of Chinese insider trading activities, I find that migrant TMT members earn significantly higher abnormal returns than non-migrant TMT members when they purchase their own firms’ shares. These migrant managers are more likely to exploit their private information related to future successful innovation. This positive association between migrant top managers and trading profitability weakens when migrant managers develop local social capital with local officials or possess legal experience. My findings suggest that migrant TMT members are more likely to exploit private information when making insider trades. These findings contribute to the literature by providing evidence on how migration shapes managerial decision-making in the context of insider trading. Finally, in Essay Three, I examine the association between migrant CEOs and audit fees. Using a sample of Chinese A-share listed firms spanning the period 2008-2020, I find that compared to other firms, firms with migrant CEOs tend to pay higher audit fees than any other clients but do not report longer audit report lag. This relationship is robust to controlling for various fixed effects, entropy balance matching, instrumental variables regression, and difference-in-difference analysis. I further find migrant CEOs, tend to demand high-quality auditing because of their innovative activities and thus pay higher audit fees. Cross-sectional tests show that the fee premium is diminished in firms with gender-diverse audit committees, and firms audited by longer-tenure auditors. My research sheds light on how management operating styles associated with migrant CEOs’ characteristics linked to audit fees.
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    Climate change impacts and renewable energy innovation : a firm-level analysis : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Management at Massey University, Albany, Auckland, New Zealand
    (Massey University, 2024-10-14) Rastegar, Hiva
    Amidst the escalating challenges posed by climate change, the transition to renewable energy emerges as a pivotal strategy for businesses and organisations to reduce environmental footprints and enhance sustainability. Against this backdrop, this thesis delves into the complex interplay between climate change impacts and firms' pursuit of renewable energy innovation, drawing on the Behavioural Theory of the Firm. Concentrating on the specific impact of climate change-induced natural disasters, this research investigates their direct influence on firms’ pursuit of renewable energy innovation, while also considering the moderating effects of market dynamics. With climate change posing unprecedented risks and opportunities for businesses, understanding these dynamics becomes crucial for developing effective strategies and policies to foster sustainable practices. Employing a quantitative methodology, this study scrutinises the behaviour of U.S. firms following climatological disasters from 2013 to 2018, using a Difference-in-Differences model complemented by meta-analysis. The findings reveal that climatological disasters significantly motivate firms to pursue renewable energy innovation. The study also identifies that the pursuit of renewable energy innovation by peer firms is identified as a significant influence, underscoring the influence of industry trends and competitive behaviour on corporate innovation pathways. This contrasts with other market dynamics; investor sentiment and media coverage were found not to have a significant effect on firms’ renewable energy innovation post-disaster. In a deeper exploration of the factors moderating the effect of climatological disasters on renewable energy innovation, the research unveils that firms falling below their performance aspirations are more likely to intensify their pursuit of renewable energy innovation post-disasters, viewing innovation as a solution to narrow the performance gap. Additionally, subsidiaries of foreign multinational enterprises demonstrate a less pronounced increase in renewable energy innovation compared to domestic firms, indicating that firm origin significantly affects their pursuit of innovation following climatic events. Further, natural disaster uncertainty emerges as a significant determinant, affecting the propensity for renewable energy innovation in a context marked by unpredictability. Lastly, a firm’s history of natural disasters influences its approach to renewable energy innovation, suggesting that past experiences could foster a foundation of resilience or engender a posture of strategic prudence. The thesis contributes to the academic literature by offering new insights into the interplay between climate change impacts and renewable energy innovation, highlighting the complexity of firms’ behaviour following environmental challenges. It deepens the Behavioural Theory of the Firm by integrating the threat rigidity model to explain how firms behave following climate change impacts. The significance of this study extends beyond its academic contributions, providing a roadmap for climate action that enables policy-makers, business leaders, and stakeholders to effectively tackle the ongoing climate change crisis. The research offers guidance on how firms can leverage local insights and past disaster experiences to enhance their pursuit of RE innovation following climate change-induced natural disasters. It suggests that both domestic firms and multinational enterprises need targeted strategies that align with their operational contexts and previous experiences. The policy implications advocate targeted support that aligns with the distinct needs of domestic firms and multinational enterprises, thereby facilitating a more tailored and effective pursuit of RE innovation post-climatological disaster. Policies should promote the integration of natural disaster risk assessments into strategic planning, support collaborative innovation efforts, and enforce transparency in reporting RE innovation. These policy recommendations are designed to directly contribute to Sustainable Development Goals 7 (affordable and clean energy) and 13 (climate action), by enhancing energy security, promoting sustainable energy use, and fostering innovation to combat climate change impacts. This highlights the study’s pivotal role in contributing to sustainable development and achieving climate action goals.
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    Essays on CEO characteristics and firm behaviour in China : a thesis presented in fulfilment of the requirement for the degree of Doctor of Philosophy in Finance at Massey University, Manawatu campus, New Zealand
    (Massey University, 2023) Liu, Xutang
    This thesis consists of three essays. Essay one investigates the effect of chief executive officer (CEO) pay disparity on firm performance using a large sample of Chinese listed firms from 2005 to 2018. It is found that CEO pay disparity is associated with better firm performance. This result supports the rank-order tournament theory that a large pay disparity between the CEO and non-CEO top executives provides non-CEO top executives with strong tournament incentives to work harder for promotion of the next CEO. Further analysis indicates that CEO political connection and CEO tenure significantly weaken the effectiveness of tournament incentives because politically connected CEOs and CEOs with long tenures are more powerful and tend to entrench themselves. Moreover, the positive promotion-based tournament effects are reduced by female and older non-CEO top executives since they are less sensitive to tournament incentives. In addition, we examine the effectiveness of the 2015 “pay ceiling” regulation and find that this regulation significantly reduces CEO pay disparity and the positive tournament effect on firm performance in state-owned enterprises (SOEs). Our results suggest that CEO pay disparity can be used an effective corporate governance mechanism in improving firm performance and policy-makers should thoroughly consider potential side effects when limiting top executives’ compensation. The second essay examines the influence of CEO early-life experience on accounting conservatism. Using China’s Cultural Revolution (1966–1976) as a shock to risk attitude, this study finds that CEOs who experienced the Cultural Revolution in their early life are more conservative and risk-averse, thus leading to a higher level of accounting conservatism. We further document that political influence can moderate such positive association. In particular, the Cultural Revolution effect is more pronounced in regions with higher political risks and in SOEs. Additional analysis suggests that CEOs with early-life Cultural Revolution experience tend to increase firm’s provisions for liabilities and decrease accrual-based earnings management, indicating the risk-averse attitude of such CEOs. Our findings add new evidence to support the upper echelons theory and the imprinting theory by highlighting the important role of CEOs’ early-life traumatic experience in affecting firm financial reporting behaviour. In the third essay, we also focus on CEOs’ early-life Cultural Revolution experience and study its impact on stock price crash risk. We find that CEOs with early-life Cultural Revolution experience are negatively and significantly associated with stock price crash risk. This finding indicates that CEOs who experienced the Cultural Revolution in their early life are more risk-averse and less likely to hoard bad news. Further analysis indicates that such a negative association is more salient in firms with higher litigation risk, e.g., when firms are subjected to major lawsuits, in high-litigation risk industries, and in provinces with better legal development. In addition, the channel analysis suggests that CEOs with early-life Cultural Revolution experience tend to reduce corporate earnings management and tax avoidance, explaining the negative effect of CEO early-life experience on crash risk. These findings also support the upper echelons theory and the imprinting theory. Overall, this thesis documents the essential role of CEO characteristics on managerial decision-making and firm behaviours.
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    Aligning interests : the impact of CEO compensation schemes on corporate executive behaviour and the cost of debt : a thesis presented in fulfilment of the requirements for the degree of Doctor of Philosophy in Finance, Massey University, Palmerston North, New Zealand
    (Massey University, 2022) Manu O'uiha, Sulueti Tupoutu'a Lawai
    A key element of corporate governance is executive compensation. This study examines the effectiveness of two compensation methods for chief executives: inside debt and vesting equity. In essay one, inside debt aligns management incentives with inside bondholder incentives (since they both hold debt), resulting in less risky corporate policies and reducing corporate risk-taking. This study shows empirically that inside debt is associated with less problematic situations (i.e., small earnings declines), less real activity spending cuts (such as marketing and R&D research), and lower yield spreads on corporate bonds. In essay two, company executives and bond investors are concerned about short-term prices. When executives’ compensation includes vesting equity, their interests are aligned. In this study, vesting equity reduces the cost of debt. Among the two components of vesting equity, the option lowers costs of debt, while stock keep costs high. The results suggest investors view vesting options as the best way to align executives’ and bondholders’ interests. Vesting equity may also reduce risk-taking activities, affecting bond prices. In summary, the results show that bondholders are aware of the risk-taking and risk-avoidance incentives created by executive compensation schemes. Inside debt and vesting equity strengthen and align executive interests with those of inside and external bondholders.
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    Essays on corporate governance in Chinese listed firms : a thesis presented in fulfilment of the requirement for the degree of Doctor of Philosophy in Finance at Massey University, Manawatu campus, New Zealand
    (Massey University, 2022) Wang, Lu
    This thesis consists of three essays. In the first essay, we investigate government resource allocation through related-party transactions (RPTs) using hand-collected data of RPTs between non-corporate government agencies and state-owned enterprises (SOEs) in China. It shows that more resources are allocated to SOEs with a politically connected chairman of the board, small SOEs and SOEs located in less-developed regions. The results indicate that Chinese governments allocate more resources through RPTs to SOEs with stronger political incentives and promote the new wave of Chinese SOE reform. However, in SOEs with a politically connected chairman, resources obtained through RPTs are only associated with increased investment expenditure and not with SOEs’ labour intensity. This essay explores a unique channel of government resource allocation among SOEs and provides evidence to the critical view of government intervention. The second essay investigates the effects of top executives’ reputation concern on earnings quality in China’s listed SOEs. Existing studies on executive reputation mainly focus on executives in a competitive executive labour market. Therefore, it is of great interest to examine whether reputation concern matters to top executives in SOEs, whose career development heavily depends on the preference of government bureaucrats. We define chairpersons with concurrent positions in listed SOEs’ shareholding firms as “spotlight” executives that may receive more external attention. The evidence shows that “spotlight” executives positively influence the earnings quality of SOEs measured by earnings management via RPTs. Such a positive influence is achieved through the intensive external attention paid to those executives in the spotlight. However, the positive reputation effect becomes insignificant when the political objectives of SOEs are pronounced. Further evidence shows that the positive impact of “spotlight” executives on earnings quality is shaped by various characteristics of SOEs, such as different types of state control, the industry sectors SOEs come from, firm performance, the timing of seasoned equity offerings external monitoring. Essay three studies whether and if so, how managerial efficiency influences stock price crash risk in China’s listed firms. The evidence suggests that executives with better efficiency can reduce stock price crash risk, and the beneficial effect is achieved through improved firm information transparency and lower excessive risk-taking. Further, the beneficial impact of managerial efficiency on crash risk is more pronounced in SOEs, firms located in less developed regions and firms that pay higher compensation to managers. This essay sheds light on the influence of managerial ability in emerging markets with weak institutions, such as China. Evidence from the three essays is robust after considering endogeneity issues. The three essays provide important policy implications. First, imposing government intervention on SOEs does not lead to efficient usage of government resources. Second, the spotlight is a powerful mechanism to discipline managerial behaviour in SOEs. In addition, free SOEs from political interference tends to facilitate the monitoring of the spotlight. Third, it is essential for firms in emerging markets, especially SOEs, to adopt methods of evaluating managerial efficiency and select managers that provide better efficiency, as they can not only utilize company resources and produce outputs more efficiently, but also improve firm transparency, reduce excessive risk-taking, and thus reduce stock price crash risk.
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    Corporate governance of banks in Vietnam and their roles on banks’ risk-taking and efficiency : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Banking Studies at Massey University, Manawatu Campus, New Zealand
    (Massey University, 2020) Tran, Thi Minh Trang
    This thesis comprises three essays that investigate the effectiveness of corporate governance mechanisms associated with recent Vietnamese banking reform on Vietnamese banks’ risk-taking and efficiency. The thesis uses a hand-collected dataset on accounting and corporate governance data from annual statements published by commercial banks during the 2006-2016 period. The first essay examines the role of foreign directors on bank risk-taking, using data from 32 commercial banks in Vietnam in the 2006-2016 period. Our findings suggest foreign directors increased bank risk-taking after 2011. The relationship is robust after taking account of potential endogeneity problems and different measures of bank risk-taking. The explanation is that foreign directors are motivated to encourage management to increase risk-taking to earn short-term returns when there is uncertainty in macroeconomic conditions. Other characteristics such as female directors, family related directors, and board size on risk-taking are also discussed. There is no evidence showing that foreign directors are more or less risk-averse in listed banks vs unlisted banks or in state-owned banks vs private banks. The second essay investigates the impact of female directors on boards on bank efficiency, using data from 32 commercial banks, covering the 2006-2016 period. The relationship is estimated by employing one-stage stochastic frontier analysis, using the Battese and Coelli (1995) (BC95) approach. The two-stage distributional free approach proposed by Cornwell, Schmidt, and Sickles (1990) (CS90) is employed as a robustness check. The result shows a robust relationship between female directors and cost-efficiency. This suggests that female directors are associated with a decrease in cost efficiency. A possible explanation is that female directors are less experienced in management than male directors and have less access to environmental resources that benefit firms. The third essay examines the impact of mergers and acquisitions (M&As) on bank efficiency, using a balanced panel dataset from 22 commercial banks over the 2008-2016 period. The study employs a two-stage DEA window analysis. Our findings suggest that there is no significant relationship between M&As and bank efficiency, which is not surprising given the small number of M&A events so far. However, there is evidence that Vietnamese banks experienced less improvement in efficiency after M&As. A possible explanation for this is that the M&As might not be not driven by profit-maximization, but by the government encouragement to rescue weak banks. Also, the combined entities need to spend additional resources on resolving the bad debts transferred from the weak, targeted banks.