Bequest motive, information transparency, and family firm value: A natural experiment

Huang, Haijie; Lee, Edward; Lyu, Changjiang; Zhao, Yiyi

doi:10.1016/j.jcorpfin.2020.101751

Cited by 14 publications

(3 citation statements)

References 109 publications

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“…Given the differences in accounting standards between the financial and other industries, we exclude financial firms from the sample (Du et al, 2022). We define a family firm as an enterprise in which the largest shareholder is an individual or a family, with a shareholding ratio above 10% and in which at least one family member participates in the management or control of the enterprise (Amit et al, 2015; Huang et al, 2020; Pan et al, 2018; N. Xu et al, 2015). We collect data on family firms' shareholders from a variety of sources, such as annual reports.…”

Section: Methodsmentioning

confidence: 99%

Non‐family shareholder governance and the digital transformation of family firms: Evidence from China

et al. 2023

Corporate Governance

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Research Question/IssueWe investigate the influence of non‐family shareholder governance on Chinese family firms' digital transformation strategies.Research Findings/InsightsWe use the socioemotional wealth theory to examine the impact of non‐family shareholder governance on family firms' digital transformation. We find that the influence of non‐family shareholder governance by appointing directors can significantly promote the implementation of digital transformation strategies through their capital and human effects in family firms. In contrast, non‐family shareholders only play a positive role in family firms' digital transformation when they are blockholders. In addition, non‐family shareholder governance plays a significant role in promoting the digital transformation of family firms with entrepreneurship and a high degree of industry competition. Regarding external digital development, the Broadband China policy complements family firms' digital transformation strategies. The characteristics of the appointed directors suggest that the introduction of appointed directors, an excess of appointed directors, and the inclusion of appointed directors with digital expertise can effectively promote the digital transformation of family firms. The characteristics of controlling families show that socioemotional wealth can further optimize the relationship between non‐family shareholder governance and digital transformation.Theoretical/Academic ImplicationsWe not only verify the rationality and effectiveness of non‐family shareholder governance in combination with digital transformation strategies but also further observe the impact of the heterogeneity of directors appointed by non‐family shareholders on family firms' digital transformation strategies. Thus, our study tests the influence of non‐family shareholder governance on digital transformation and enriches the literature on non‐family shareholder governance and family firms' strategies.Practitioner/Policy ImplicationsThis study offers insights to family firms regarding how to effectively promote non‐family shareholders' participation in corporate governance and help family firms to achieve the goal of “everlasting foundation.”

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Section: Methodsmentioning

confidence: 99%

Non‐family shareholder governance and the digital transformation of family firms: Evidence from China

et al. 2023

Corporate Governance

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“…It is more pronounced in emerging economies (e.g. China), which are characterized by highly concentrated ownership, lower minority investor protection and the absence of standard corporate governance mechanisms (Huang et al. , 2020; Jiang et al.…”

Section: Further Analysismentioning

confidence: 99%

Benefit synergy or “fishing in troubled waters”? Economic policy uncertainty and executive perquisite consumption

Xie

Yang

2022

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PurposeEconomic policy uncertainty (EPU) has huge impact and harm on real economy, so the economic logic and other economic effects behind this must be further studied. By constructing the “China Economic Policy Uncertainty Index” to capture the degree of EPU faced by Chinese companies, the authors empirically test whether and how EPU affects the level of executives' perquisite consumption.Design/methodology/approachThis study investigates the relationship between EPU and executive perquisite consumption based on a sample of 3,185 publicly listed firms in China. To examine the relationship between EPU and executives' perquisite consumption, a mixed least squares method was used for regression. To alleviate the problem of missing variables that do not change over time and control the influence of unobservable individual heterogeneity at the firm level, the firm fixed effects model is used for regression.FindingsThe study finds that EPU is positively associated with executive perquisite consumption. This positive association is stronger for firms with smaller size, lower management shareholding and higher levels of separation of ownership and control. Effective external governance (i.e., analyst coverage, media coverage, auditor and market competition) can mitigate the relationship between EPU and executive perquisite consumption. Further analysis reveals that EPU increases executive perquisite consumption by holding more cash and decreasing firm risk taking. EPU hurts market value of firms by boosting executive perquisite consumption and tunneling.Practical implicationsIn an environment with high EPU, the board of directors should reduce managers' compensation performance sensitivity to ease the agency conflict caused by uncertainty. Firms should improve their governance mechanisms and standard and pay attention to their environmental changes. Policymakers should pay attention to maintaining the continuity and predictability of policies, stabilizing the economic policy expectations of market entities and avoiding frequent changes in policies that can harm economic and firm value. The regulatory authorities should actively guide listed companies to increase active information disclosure during periods of high policy uncertainty.Originality/valueThis study contributes to the research on corporate governance by showing how EPU influences executives' behaviors. The authors advance relative studies by showing that this uncertainty embedded in a firm's external environments influences executive perquisite consumption. This study also contributes to the literature on how internal and external governances influence corporate behavior during uncertainty. These findings extend this line of research by suggesting that effective external governance is an attribute that can alleviate the effect of uncertainty on managers' opportunistic behaviors.

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“…Financial knowledge, satisfaction, and bequest motives in this older group could be studied. Introductions should state the problem, previous work, purpose, and contribution (Huang et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

A Study of Financial Behavior Among Urban Older Chinese

Chong,

Neoh,

Lee

et al. 2023

MAJCAFE

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Older Malaysian Chinese has one of the highest mean incomes among the other ethnicity in Malaysia. As these individuals grow older, their savings and retirement fund will dwindle and are insufficient for their spending. As a result, these individuals will seek to earn extra income from investment so that they could save more for their children and lifetime care. However, investment is subject to risk. Thus, this study examines the effect of gender, age, financial satisfaction, financial knowledge, and bequest motives on older Malaysian Chinese financial risk tolerance. In this study, the target sample was those Chinese aged 50 or older residing in Selangor, Malaysia. The data were collected through face-to-face interviews with the purposive sampling method. As a result, the survey covered a sample of 263 completed cases. The multiple regression analysis shows that males with optimal financial knowledge, altruistic personality (unselfish and concern for other people), and variables positively influence older Malaysian Chinese’s financial risk tolerance (risk-taker). At the same time, ages and financial satisfaction variables are negative and significantly influence financial risk tolerance (risk- averse). Lastly, these findings may contribute to the relevant authority, such as retirement fund providers, to formulate a proper long-term plan to ensure Chinese older Malaysians’ individual and family financial stress during retirement.

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Bequest motive, information transparency, and family firm value: A natural experiment

Cited by 14 publications

References 109 publications

Non‐family shareholder governance and the digital transformation of family firms: Evidence from China

Non‐family shareholder governance and the digital transformation of family firms: Evidence from China

Benefit synergy or “fishing in troubled waters”? Economic policy uncertainty and executive perquisite consumption

A Study of Financial Behavior Among Urban Older Chinese

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