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Articles 1 - 7 of 7
Full-Text Articles in Business
Do Venture Capitalists Play A Monitoring Role In An Emerging Market? Evidence From The Pay-Performance Relationship Of Chinese Entrepreneurial Firms, Jerry Cao, Qigui Liu, Gary Tian
Do Venture Capitalists Play A Monitoring Role In An Emerging Market? Evidence From The Pay-Performance Relationship Of Chinese Entrepreneurial Firms, Jerry Cao, Qigui Liu, Gary Tian
Qigui Liu
This paper investigates venture capitalists' monitoring of managerial behaviour by examining their impact on CEO pay-performance sensitivity across various controlling structures in Chinese firms. We find that the effectiveness of venture capitalists' monitoring depends on different types of agency conflict. In particular, we find that venture capital (VC) monitoring is hampered in firms that experience severe controlling-minority agency problems caused by disproportionate ownership structures. We provide further evidence that VC is more likely to exert close monitoring in firms that have greater managerial agency conflict, and thus require more direct monitoring. However, controlling-minority agency problems have a greater impact on …
Does Control-Ownership Divergence Impair Market Liquidity In An Emerging Market? Evidence From China, Xiaojun Chu, Qigui Liu, Gary Tian
Does Control-Ownership Divergence Impair Market Liquidity In An Emerging Market? Evidence From China, Xiaojun Chu, Qigui Liu, Gary Tian
Qigui Liu
This paper examines how institutional characteristics of emerging economies influence the effect of control-ownership divergence on market liquidity. We find that the divergence is negatively associated with liquidity and that this negative relationship is more pronounced in firms with more severe agency problems and information asymmetry. We argue that in an emerging market, the negative effect of the divergence on liquidity is worsened by state ownership and poorer shareholder protection, both of which result in more severe agency conflicts; we also find, however, that this effect is alleviated by the NTS reform, which aligns the interest of different shareholders.
Venture Capital And Executive Incentives In China, Jerry Cao, Qigui Liu, Gary Tian
Venture Capital And Executive Incentives In China, Jerry Cao, Qigui Liu, Gary Tian
Qigui Liu
This paper examines the effect that venture capital (VC) has on the pay-performancerelationship in listed Chinese firms. We find that VC has a significantly positive effect onCEO compensation and the pay-performance relationship, such effect particularly stronger infirms needing more managerial efforts and discretions (higher growth opportunity or higherlevels of capital expenditure). In addition, we show that VC-backed firms with moremanagerial discretions are more likely to use stock options. The evidence suggests thatventure capital investors use more sensitive compensation contract for top executives inChinese when the need for managerial discretion is greater. Such compensation schemes byVCs enhance firm performance subsequently.
The Effect Of Ownership Structure On Leverage Decision: New Evidence From Chinese Listed Firms, Qigui Liu, Gary Tian, Xiaoming Wang
The Effect Of Ownership Structure On Leverage Decision: New Evidence From Chinese Listed Firms, Qigui Liu, Gary Tian, Xiaoming Wang
Qigui Liu
This paper examines the effect of state control and ownership structure on the leverage decision of firms listed in the Chinese stock market. Our results show that state-owned enterprises (SOEs) have higher leverage ratios than non-SOEs, and SOEs in regions with a poorer institutional environment have higher leverage ratios than SOEs in better regions. We also show that the largest shareholding (the percentage of shares held by the largest shareholder) in the SOEs has a negative relationship with the leverage ratio, while the largest shareholding in non-SOEs has a non-linear relationship with the short-term and long-term debt ratios. Finally, this …
The Stock Market Implication Of Political Connections: Evidence From Firms' Dividend Policy, Jerry Cao, Sheng Huang, Qigui Liu, Gary Tian
The Stock Market Implication Of Political Connections: Evidence From Firms' Dividend Policy, Jerry Cao, Sheng Huang, Qigui Liu, Gary Tian
Qigui Liu
Political connections are valuable for shareholders of privately-run firms especially in countries with weak legal institutions. We study the effect of a firm's political connections in the public equity market by focusing on its impact on the firms' dividend policy. Prior studies suggest that dividends signal the commitment for proper treatment of minority shareholders and thus high growth firms pay dividends to establish such a reputation for better access to equity market in the future. Using a sample of privately-owned Chinese firms, we find that politically connected firms are less likely to pay dividends and pay less if they pay. …
Does Political Capital Create Value In The Ipo Market? Evidence From China, Qigui Liu, Jinghua Tang, Gary Gang Tian
Does Political Capital Create Value In The Ipo Market? Evidence From China, Qigui Liu, Jinghua Tang, Gary Gang Tian
Qigui Liu
This study examines the value of political capital in the Chinese IPO market. We find a positive relationship between a politically connected executive and the probability of IPO approval of entrepreneurial firms. We further identify that shareholders value those connections and give a market premium to connected firms after the firms go public. We provide evidence that other types of political capital gained through external sources, such as politically connected sponsors and PE investors, also bring benefits to the firms in their IPO approval, and these connections substitute for the effect of the executive's political connections on IPO approval. We …
Political Connections, Founding Family Ownership And Leverage Decision Of Privately Owned Firms, Qigui Liu, Gary Tian
Political Connections, Founding Family Ownership And Leverage Decision Of Privately Owned Firms, Qigui Liu, Gary Tian
Qigui Liu
In this paper, we examine the effect of political connections versus founding family ownership on the relationship between disproportional ownership structure and leverage decisions of privately owned firms listed in Chinese market. We find that disproportional ownership has positive effect on leverage, indicating that controlling shareholder tends to use both disproportional ownership structure and debt to expropriate. We also find that the interacted term between disproportional ownership and political connections has a positive impact on leverage ratio, and disproportional ownership structure is negatively related with leverage ratio of founding-family controlled firms, which indicate a substitute effect between political connections and …