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Does Banks' Dual Holding Affect Bank Lending And Firms' Investment Decisions? Evidence From China, Xiaofei Pan, Gary Tian
Does Banks' Dual Holding Affect Bank Lending And Firms' Investment Decisions? Evidence From China, Xiaofei Pan, Gary Tian
Gary Tian
This study investigates the effect of banks' dual holding on bank lending and firms' investment decisions using a sample of listed firms in China. We find that dual holding leads to easier access to bank loans, a result that is more pronounced for non-state-owned enterprises (non-SOEs) than SOEs. We also find that dual holding distorts banks' lending decisions and harms the investment efficiency for SOEs, while resulting in optimal lending decisions and enhanced investment efficiency for non-SOEs. For non-SOEs, further analysis suggests that optimal lending decisions and efficient investment can be achieved for firms with higher ownership concentration, and firms …
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
Gary Tian
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 …