Executive compensation and conflict between shareholders and creditors: Evidence from creditor litigation

Using creditor litigation data from China,we investigate whether creditors can participate in corporate governance when agency conflict between shareholders and creditors is severe.By comparing firms that have experienced creditor lawsuits(litigation firms)with those that have not(non-litigation firms),we find that litigation firms have lower pay-performance sensitivity before lawsuits,suggesting that these firms have weaker corporate governance.This result is consistent with our expectation that creditors participate in corporate governance by introducing external monitoring when internal monitoring,dominated by shareholders,is insufficient.We also find that the association is stronger for firms with more severe shareholder-creditor agency conflict.Moreover,creditor litigation is strongly related to low pay-performance sensitivity when the external legal environment is strong.Our results remain robust to different model specifications and after addressing endogeneity problems.

The interaction effect of foreign capital inflows and financial development on economic welfare in sub-Saharan Africa

This study examines the interaction effects of foreign capital inflows and financial development on economic welfare in sub-Saharan Africa(SSA).Estimates based on the system-GMM estimator using panel data on 23 SSA countries for 2000 to 2013 establish several results.First,the interaction between foreign capital inflows and financial development positively affects economic welfare in SSA.However,this effect was negative after one year.Second,the partial indirect effects of foreign capital inflows on economic welfare,conditional on the level of financial development,are positive,though they become negative after one year.Third,the total effect of foreign capital inflows on economic welfare is positive.The effect becomes negative after a year,though the predominant source of financial development is domestic credit.The consistency of these results indicates the importance of financial development in transmitting foreign capital to economic welfare enhancement.Developing the SSA’s financial sector to meet specific welfare-enhancing demands may potentially convert a large share of capital inflows into improved economic welfare and eliminate the negative effects.

The Analysis of the Governance Effect of Chinese Public Corporation Based on Capital Structure

Under the existed system, the capital structure is the basis of the corporate governance, the structure of the corporate governance is the reflection of the capital structure. The choice of the capital structure decides the level of the corporate governance to a great degree. This paper discusses the governance effect of Chinese public corporation in the view of capital structure. At last, the author suggests that the government should change the state of state-owned stock which takes a great proportion, make the state-owned stocks and corporation stocks enter and circulate in the market, develop investment banks, promote the stockholder＇s rights to circulate and recombine, enhance the supervision and the management of the stock markets, perfect the mechanism of the market＇s operation, set up the mechanism of the way to protect to pay back the debt, perfect the system of bankruptcy and develop the way of bond-financing, offset the drawbacks of the indirect-financing among banks and so on. All of the advice was given to perfect the public company＇s capital structure and improve the efficiency of the corporate governance.

Corporate R&D and Creditor Value: A Contingency Perspective

This study investigates the relationship between corporate R&D and creditor value.The empirical results suggest that such relationship is contingent on the situations of existing R&D investment and institutional arrangement of corporate governance.We find that R&D investment increases creditor value when insufficient R&D threatens survival,while reduces creditor value when such threat is mitigated.Moreover,such curvilinear relationship is mainly driven by firms with relatively weak managerial entrenchment.Hypotheses are tested with 98 U.S.listed firms in manufacturing sector over 2001-2007.

A Study on the Capital System Reform Tendency of Chinese company

This paper will analyze the history and evolvements of capital system in order to grasp the tendency of capital system reform. Managers should give more attention to the establishing of reform institution and the supervising of company capital system＇ s operation in the process of reform. Managers should also attach great importance to the third party and creditors when they value the interests of shareholders. It is imperfect to only emphasis or value the interests of the shareholders or the third party and creditors. In addition, creditor＇ s self-protection of civil action should obtain much more approaches in the process of reform.

China as a Net Creditor： An Indication of Strength or Weaknesses？

China＇s international investment position is characterized by large net foreign assets, a dominance of low-return foreign exchange reserves and costly foreign direct investment in foreign assets and foreign liabilities. In addition, China＇s foreign investment positions are facing potentially large exchange risks. These features reflect entrenched institutional and structural problems in China, including underdeveloped capital markets, biased resource allocation and a defective social security system. China＇s net creditor status might actually be an indication of weakness rather than strength. To improve its international investment position, China must speed up economic reforms and allow the market to play a fundamental role in resource allocation.