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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.
Do socially preferred firms disclose more ESG information?
(Emerald Publishing Limited, 2025-08-25) Peng Z; Anderson HD; Chi J; Liao J
Purpose While research shows “sin” firms voluntarily disclose more social responsibility information, little research examines such practices in socially preferred industries. This study aims to address this gap by contrasting firm-level environmental, social and governance (ESG) information disclosure of New Zealand firms. Design/methodology/approach This study extracts all New Zealand listed companies for which Bloomberg provides ESG data from 2010 to 2023. Besides, this study excludes firms in financial service sector. The final sample contains 52 companies and 514 firm-year observations. Findings This study find that retirement village firms and the healthcare industry whose operations are commonly considered to be socially preferred, disclose less ESG information than firms in other industries. This result remains after a series of robustness tests, including alternative measures and matching samples. The addition of ESG provisions in the 2017 New Zealand Exchange’s (NZX) Corporate Governance Code, female and independent directors have a significantly positive moderating effect on ESG disclosure. In addition, retirement village firms with higher financial constraints increase ESG disclosure. Furthermore, this study finds that increased ESG disclosure enhances market valuation and reduces the cost of debt. Research limitations/implications A natural limitation of this research is its limited sample size, focusing on New Zealand firms, which may limit the generalisability of the findings to other regions with different regulatory and cultural contexts. Practical implications This research suggests that firms in socially preferred industries, like healthcare and retirement villages, may need stronger incentives or guidelines to improve ESG disclosure. Enhancing corporate governance, particularly through independent and female directors, could positively influence ESG transparency, guiding policy and board composition strategies. Social implications The research highlights a potential gap in ESG disclosure among industries. This suggests a need for greater public awareness and advocacy to ensure that even socially favoured sectors are held accountable for their environmental and social impacts, promoting broader corporate responsibility. Originality/value This study contributes to the literature by revealing that socially preferred industries, such as healthcare and retirement villages, may disclose less ESG information than other sectors. It provides novel insights into the role of corporate governance, particularly the influence of female and independent directors, in enhancing ESG transparency.
Reprint of: Corporate culture and carbon emission performance
(Elsevier Ltd on behalf of the British Accounting and Finance Association, 2025-02-12) Hasan MM; Bhuiyan MBU; Taylor G
Using a large sample of U.S. firms from 2002 to 2020, we investigate the relationship between corporate culture and the extent of carbon emissions. We provide evidence that the quantum of carbon emissions is negatively associated with corporate cultural attributes manifested by integrity, teamwork, innovation, and respect. These results hold after controlling for potential endogeneity issues using several identification techniques. We also document that the negative culture–emissions relationship is magnified in firms with weak corporate governance and in those operating in environmentally sensitive industries. Additionally, this relationship is less salient in the presence of social capital. Finally, we demonstrate that in firms with a stronger culture, elevated carbon emissions result in a lower firm value. Our findings may be of interest to environmental regulators and management in their pursuit of firm-level carbon emission targets.
Corporate culture and carbon emission performance
(Elsevier Ltd, 2024-11) Hasan MM; Bhuiyan MBU; Taylor G
Using a large sample of U.S. firms from 2002 to 2020, we investigate the relationship between corporate culture and the extent of carbon emissions. We provide evidence that the quantum of carbon emissions is negatively associated with corporate cultural attributes manifested by integrity, teamwork, innovation, and respect. These results hold after controlling for potential endogeneity issues using several identification techniques. We also document that the negative culture–emissions relationship is magnified in firms with weak corporate governance and in those operating in environmentally sensitive industries. Additionally, this relationship is less salient in the presence of social capital. Finally, we demonstrate that in firms with a stronger culture, elevated carbon emissions result in a lower firm value. Our findings may be of interest to environmental regulators and management in their pursuit of firm-level carbon emission targets.
In the radiance of enlightenment: The influence of nontheistic religions on corporate default risk
(Elsevier B V, 2024-06) Feng Y; Hao W; Fang J; Wongchoti U
We investigate whether religious site density around a firm's headquarters is related to corporate default risk in China. We find that public firms surrounded by a higher number of Buddhist and Taoist temples are associated with lower default risk. In contrast to the widely documented impact of Western religiosity on corporate behavior, our mechanism tests indicate that lower default risk related to religious site density is primarily driven by better corporate governance and not by a surge in corporate conservatism. Finally, we find that this default risk lowering effect is more pronounced when firms also possess greater political resources.
Local creative culture and audit fees
(Elsevier Ltd on behalf of British Accounting Association, 2023-03-13) Costa MD; Habib A
This paper examines the association between local creative culture and audit fees. Using a large, unbalanced panel data of listed US firms between 2004 and 2018, we find evidence that firms headquartered in US counties with high creative culture tend to pay higher audit fees than firms headquartered in counties with low creative culture. We also find that such firms tend to have longer audit report lag and are subject to more shareholder litigation. Cross-sectional tests show that real earnings management, managerial risk-taking propensity, and external corporate governance environment moderate the positive association between creative culture and audit fees. The positive association between local creative culture and audit fees remains robust to controlling for endogeneity concerns. Our study contributes to the emerging literature on local creative culture by providing evidence that local creative culture encourages managers and employees to undertake risky initiatives, thereby increasing audit risks.
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.
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.
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.
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.

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