Business Commons^™

Does Bank Ownership Imply Efficient Monitoring? Evidence From Bank Lending And Firm Investment Efficiencies In China, Gary G. Tian, Xiaofei Pan

Faculty of Business - Papers (Archive)

This study investigates the effect of bank ownership on lending and firm investment efficiencies to give reasons for the mixed evidence that exists on the impact of bank ownership on firm performance. Using China's listed firms as an example, we find that bank ownership reduces the efficiency of bank lending and harms investment efficiency for state-owned enterprises (SOEs), while simultaneously relating to optimal lending decisions and enhanced investment efficiency for non-SOEs. Our findings suggest that banks monitor non-SOEs effectively, but are less effective at monitoring SOEs. We document that banks' ex post monitoring on non-SOEs' investment policy results from their …

Mutual Fund Ownership, Firm Specific Information, And Firm Performance: Evidence From China, Wenhua Sharpe, Gary Tian, Hong Feng Zhang

Faculty of Business - Papers (Archive)

This paper shows empirically that the positive association between mutual fund ownership and firm value in China is mainly driven by the informed trading of mutual funds. Utilizing the unique short term feature of mutual fund holdings for the period from 2001 to 2010, we provide an informational link between a decomposed component of market-to-book ratio (firm specific valuation component) and mutual fund holdings. Specifically, we find that firms with a higher level of mutual fund ownership are associated with a higher specific value. Moreover, the positive association between the specific value of a firm and mutual fund ownership is …

Bank Connection, Corruption And Collateral In China, Xiaofei Pan, Gary Tian

Faculty of Business - Papers (Archive)

Using a sample of China's listed entrepreneurial firms, we investigate the relationship between bank connection, corruption and collateral requirements. We find that when a firm is connected with banks, collateral requirements are significantly lower. We also find that bank connection is the channel through which corruption is exercised to benefit those firms with favoured loan terms. Our analysis further reveals that bank connection and corruption have jointly improved bank lending efficiency. However, these positive effects become weaker with government intervention in the form of an economic stimulus package. We argue that in an emerging market, bank connection facilitates rent seeking …

Performance Of Automakers In China And India: An Empirical Investigation Using Ratio Analysis, Ying Deng, Anura De Zoysa, Shyam Bhati

Faculty of Business - Papers (Archive)

Automakers in China and India are continually increasing their shares of the automobile market by adopting cost leadership strategy. In this study, we examine the operational and financial performance of automobile firms in China and India through a range of accounting ratios. This analysis provides a snap shot of operating and financial performance of Chinese automakers in comparison to one of their main competitors, India. The results of the analysis suggests that despite the public view that Indian automakers are posing serious challenge to Chinese automaker in recent years on the cost competitiveness, Chinese automakers have shown continuous improvement in …

Happiness And Job Satisfaction In Urban China: A Comparative Study Of Two Generations Of Migrants And Urban Locals, Haining Wang, Zhiming Cheng, Russell Smyth

Faculty of Business - Papers (Archive)

This study investigates determinants of happiness and job satisfaction of urban locals, first-generation migrants and new-generation migrants in China's urban workforce. We present evidence to suggest that new-generation migrants are less satisfied with their jobs and lives than first-generation migrants, despite having higher income. This finding is consistent with aspirations rising faster than income in China's fast growing urban economy.

Determinants Of Wage Arrears And Their Implications For The Socioeconomic Wellbeing Of China's Migrant Workers: Evidence From Guangdong Province, Zhiming Cheng, Ingrid Nielsen, Russell Smyth

Faculty of Business - Papers (Archive)

This study has three purposes. The first is to examine the determinants of wage arrears among rural-urban migrants in China. The second is to examine the effect of wage arrears on economic wellbeing as proxied by wages. The third is to examine how experiencing wage arrears affects several subjective indicators of wellbeing, such as feelings of belongingness and discrimination in the city. To examine the determinants of wage arrears and its implications for socioeconomic wellbeing, we employ pooled data from a unique representative dataset collected in Guangdong province, one of the major destinations for migrants in China, for the years …

Who Is Responsible For The Co2 Emissions That China Produces?, Ying Liu, Kankesu Jayanthakumaran, Frank Neri

Faculty of Business - Papers (Archive)

Most climate scientists around the world are concerned about global warming. These concerns have resulted in calls for reductions in CO₂ emissions over time. If these calls are to be heeded, an appropriate emissions accounting method must first be agreed upon by CO₂ emitting countries, none of which are more important than China. This paper estimates China′s CO₂ emissions in 2002 and in 2007 using firstly a production-based, and then a consumption-based, accounting method, both in aggregate and at the sectoral industry level. Our objectives are first to investigate the recent trends in Chinese emissions of CO …

Does Political Capital Create Value In The Ipo Market? Evidence From China, Qigui Liu, Jinghua Tang, Gary Gang Tian

Faculty of Business - Papers (Archive)

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 …

Exploring Hegemonic Change In China: A Case Of Accounting Evolution, Lina Xu, Corinne Cortese, Eagle Zhang

Faculty of Business - Papers (Archive)

Purpose - This paper provides an understanding of how accounting systems have changed across four distinct periods of hegemonic leadership in China.

Design/methodology/approach - Using Gramsci's concept of hegemony, periods of leadership and accounting change throughout Chinese history are examined, including the Confucian tradition, the rise of the socialist system followed by the Cultural Revolution under the Maoist era, and the move towards the socialist-market system in the Dengist era.

Findings - This paper shows how political leaders in these different time periods effectively achieved leadership by destroying an existing hegemony, creating a new ideology, and implanting this into people's …

The Impact Of China's New Labour Contract Law On Socioeconomic Outcomes For Migrant And Urban Workers, Zhiming Cheng, Russell Smyth, Fei Guo

Faculty of Business - Papers (Archive)

This paper examines the effect of having a labour contract on a range of employee outcomes (hours worked, social insurance coverage, subjective wellbeing and wages) for a sample of urban and migrant workers in China. A methodological contribution is that we use propensity score matching, which allows us to draw causal inferences about the relationship between having a labour contract and each of these variables. We find that the effect of having a labour contract on employee outcomes is generally large and larger than the findings in other studies suggest. As such, our results suggest that China's Labour Contract Law, …