Controlling shareholders and investment-risk sensitivity in an emerging economy

An Early Warning Risk and Control Model for Manpower Capital Investment Using Data Warehousing and Computational Intelligence

“…Literature [ 19 ] pointed out that modern portfolio theory should be used to spread the risk of manpower capital investment. Literature [ 20 ] holds that, unlike portfolio investment, the risk of manpower capital investment is often personalized and manpower capital is an illiquid asset. It established the pricing model of manpower capital and brought nonlinear assumptions, labor supply, and risk financial assets into the model to achieve the optimal investment model of manpower capital.…”

Ownership concentration and R&D investment: the moderating role of stock options

“…In addition, large shareholders are more information-intensive and have higher voting rights compared with small shareholders (Aoki, 2014;Choi et al, 2012;Rong et al, 2017). When the interests of large and small shareholders conflict, the former often protect their interests in the organization at the expense of the interests of small shareholders (Aoki, 2014;Caixe et al, 2019;Zeng and Lin, 2011), which is called tunneling (Johnson et al, 2000).…”

“…Regarding R&D investment as a strategic decision of firms, large shareholders may be more cautious and risk-averse with an increase in ownership concentration (Chen et al, 2014), and R&D investment may decrease. Because of the high risk and uncertain returns of R&D activities, large shareholders may focus on other short-term, low-risk investment options (Caixe et al, 2019). Especially, they may use corporate resources to diversify the personal risks associated with large shareholdings (Chen et al, 2014), resulting in the tunneling of large shareholders.…”

“…Even if it cannot be changed in the short term, it can adjust the rules of procedure of the general meeting of shareholders and the board of directors and give play to the role of independent directors. Ownership concentration is conducive to strengthening supervision (Choi et al, 2012;Paligorova, 2010); and it can also alleviate the agency problem of the separation of management and ownership right (Nguyen et al, 2022); however, excessive ownership concentration allows large shareholders to use company resources for their interests at the expense of smaller shareholders (Aoki, 2014;Caixe et al, 2019), thus hindering corporate R&D strategy formulation and reducing R&D investment. Therefore, the issue of ownership checks and balances should be considered when proposing management suggestions on the ownership structure.…”

“…The main problem of corporate governance has changed from the conflicts between managers and small and medium-sized shareholders to differences in interest between large and small shareholders. At this time, large shareholders may replace R&D investment with other investments (Aoki, 2014;Caixe et al, 2019). It can be seen that ownership concentration may have a non-linear impact on R&D investment.…”