Matching Items (14)
Description
In this paper, I investigate whether participation in employee stock option exchange programs contains private information about future stock returns. High participation in employee stock option exchange programs is associated with negative future abnormal returns over the ensuing 12-month period. This association is moderated by the transparency of the firm's information environment: high institutional ownership and high financial statement informativeness weaken the negative relation between participation and abnormal returns. Controlling for transparency of the firms' information environment, the association between participation and future returns arises primarily from firms that allow the CEO to participate.
ContributorsMakridis, Vanessa Radick (Author) / Matejka, Michal (Thesis advisor) / Hwang, Yuhchang (Committee member) / Kaplan, Steven E (Committee member) / Arizona State University (Publisher)
Created2013
Description
In this study, I examine the extent to which firms rely on relative performance evaluation (RPE) when setting executive compensation. In particular, I examine whether firms use information about peer performance to determine compensation at the end of the year, i.e. after both firm and peer performance are observed. I find that RPE is most pronounced for firms that allow little or no scope for ex post subjective adjustments to annual bonuses. Conversely, firms that rely mainly on subjectivity in determining bonus exhibit little use of RPE. These findings suggest that information about peer performance is not used at the end of the year. Instead, peer performance seems to be incorporated in performance targets at the beginning of the year, at least among firms primarily using objective performance measurements. In addition, I provide new evidence on the determinants of the use of subjectivity.
ContributorsTsui, Stephanie (Author) / Matejka, Michal (Thesis advisor) / Hwang, Yuhchang (Committee member) / Kaplan, Steven (Committee member) / Arizona State University (Publisher)
Created2013
Description
The Chinese capital market is characterized by high segmentation due to governmental regulations. In this thesis I investigate both the causes and consequences of this market segmentations. Specifically, I address the following questions: (1) to which degree this capital market segmentation is caused by the fragmented regulations in China, (2) what are the key characteristics of this market segmentation, and (3) what are the impacts of this market segmentation on capital costs and resources allocations. Answers to these questions can have important implications for Chinese policy makers to improve capital market regulatory coordination and efficiency. I organize this thesis as follows. First, I define the concepts of capital market segmentation and fragmented regulation based on literature reviews and theoretical analysis. Next, on the basis of existing theories and methods in finance and economics, I select a number of indicators to systematically measure the degree of regulatory segmentation in China’s capital market. I then develop an econometric model of capital market frontier efficiency analysis to calculate and analyze China’s capital market segmentation and regulatory fragmentation. Lastly, I use the production function analysis technique and the even study method to examine the impacts of fragmented regulatory segmentation on the connections and price distortions in the equity, debt, and insurance markets. Findings of this thesis enhance the understanding of how institutional forces such as governmental regulations influence the function and efficiency of the capital markets.
ContributorsJia, Shaojun (Author) / Hwang, Yuhchang (Thesis advisor) / Chen, Hong (Committee member) / Wahal, Sunil (Committee member) / Arizona State University (Publisher)
Created2015
Description
This study provides new evidence on the choice of performance measures used in dual-class firms to incentivize CEOs. The choice of performance measures is informative about the extent to which the board of directors focuses CEO efforts on firms' long-term versus short-term objectives. To empirically operationalize performance evaluation horizon, I measure the length of the performance evaluation period in CEO stock awards, the use of stock-based measures, and the use of peer-based measures. I collect data on 419 dual-class firms and match them with a control group of single-class firms. I find that market-based metrics are less likely to be used by dual-class firms relative to single-class firms. In addition, I find that peer-based measures are much less common for dual-class than single-class firms. These findings suggest that dual-class firms shield their executives from short-term market pressures and design stock compensation contracts that deemphasize volatile stock prices.
ContributorsLi, Ji (Author) / Matejka, Michal (Thesis advisor) / Hwang, Yuhchang (Committee member) / Reckers, Philip (Committee member) / Arizona State University (Publisher)
Created2014
Description
Responding to the allegedly biased research reports issued by large investment banks, the Global Research Analyst Settlement and related regulations went to great lengths to weaken the conflicts of interest faced by investment bank analysts. In this paper, I investigate the effects of these changes on small and large investor confidence and on trading profitability. Specifically, I examine abnormal trading volumes generated by small and large investors in response to security analyst recommendations and the resulting abnormal market returns generated. I find an overall increase in investor confidence in the post-regulation period relative to the pre-regulation period consistent with a reduction in existing conflicts of interest. The change in confidence observed is particularly striking for small traders. I also find that small trader profitability has increased in the post-regulation period relative to the pre-regulation period whereas that for large traders has decreased. These results are consistent with the Securities and Exchange Commission's primary mission to protect small investors and maintain the integrity of the securities markets.
ContributorsDong, Xiaobo (Author) / Mikhail, Michael (Thesis advisor) / Hwang, Yuhchang (Committee member) / Hugon, Artur J (Committee member) / Arizona State University (Publisher)
Created2011
Description
This dissertation focuses on risk prevention and regulatory issues of financial asset trading platforms, exploring the composition of a financial asset trading platform and its risks, formulating the general framework of platform risk prevention and regulation, and discussing the methodologies for monitoring and managing the risk of financial assets trading platform. The dissertation is divided into eight chapters. The first chapter is the introduction, which discusses the current status in this research field, the motivation and significance of the research topic. The second chapter discusses the transaction cost theory, information asymmetry theory, financial risk management theory, financial supervision theory and other related basic theories related to financial asset trading platform risk prevention and supervision. The third chapter presents the definition, the main types, the generating mechanism and the transmission mechanism of the financial asset trading platform. The fourth chapter elaborates theoretically on the general framework of financial asset trading platform risk prevention and supervision based on the aspects of basic principles, key tasks, applicable methods and constituent elements. The fifth chapter discusses the performance of financial asset trading business, asset return trading business, financing business and information coupling business on financial asset trading platforms, and analyzes the risk prevention of financial asset trading platforms from a business perspective. The sixth chapter discusses the development of financial asset trading platforms in developed countries, and summarizes the experience and practice of their risk prevention and supervision based on four categories of business lines. On this basis, the dissertation draws the inspiration and implications for the future development of the trading platforms in our country. The seventh chapter puts forward policy recommendations regarding risk prevention and supervision of financial asset trading platforms in five aspects: legal positioning, credit information system, protection of consumer rights, self-discipline management and business supervision.
ContributorsXu, Chaojun (Author) / Hwang, Yuhchang (Thesis advisor) / Yan, Hong (Thesis advisor) / Chang, Chun (Committee member) / Arizona State University (Publisher)
Created2017
Description
The relative performance evaluation (RPE) hypothesis holds that executive compensation should not depend on uncontrollable exogenous shocks. Nevertheless, prior studies often find limited empirical support for this hypothesis in part because it is difficult to identify peers exposed to the same exogenous shocks. I propose a new way to identify peers and to test the RPE hypothesis in the context of a specific shock. In particular, I select peers based on the sensitivity of their stock returns to exchange rate fluctuations. I find evidence that firms respond to large exchange rate movements by ex post adjusting their peer selection to include peers with similar exchange rate risk exposure. Moreover, after allowing for ex post peer group adjustments, I find a much stronger support for the RPE hypothesis than most of prior work.
ContributorsChen, Bing (Author) / Matejka, Michal (Thesis advisor) / Casas Arce, Pablo (Committee member) / Kaplan, Steve (Committee member) / Arizona State University (Publisher)
Created2017
Description
The Balanced Scorecard (BSC) is a strategic planning and management system that causally links actions and subsequent financial and nonfinancial outcomes. The primary goal of the BSC is to motivate actions that are congruent with the organization's long-term strategy. A secondary purpose of the BSC is to facilitate the performance evaluation of managers charged with advancing the corporate strategy. To serve this second purpose the BSC must include a time dimension. Specifically, the strategic plan must recognize time lags between actions taken, lead outcomes (often nonfinancial in nature) and lagged outcomes (usually financial success measures). If an evaluator is not provided with timeline information a subordinate may be evaluated based on inappropriate performance metrics; that is, a subordinate may be held accountable for an outcome beyond the subordinate's time span of control. This study evaluates the effect on performance evaluations and bonus allocations when evaluators are provided (or not provided) with a strategy implementation timeline. This issue has not been previously examined in the literature. This study also examines the moderating effect of experience, management buy-in to the corporate strategy, and affect on performance evaluations and bonus allocations. Results from an experiment conducted with evening MBA students show that inclusion of a strategy implementation timeline leads to more normatively correct performance evaluations, but only for experienced participants. Higher levels of both positive and negative affect were found to result in choice avoidance behavior. Buy-in to the corporate strategy was not found to have an effect.
ContributorsBartlett, Geoffrey (Author) / Reckers, Philip M.J. (Thesis advisor) / Lowe, D. Jordan (Committee member) / Hwang, Yuhchang (Committee member) / Arizona State University (Publisher)
Created2012
Description
Although China’s economy has experienced fast growth over the years, it is also characterized by a lack of innovative products and slow development of advanced production technologies. A main reason for this problem is insufficient investments in research and development (R&D) activities by Chinese firms. Because of the potential externality and free-rider effects, the economics literature has long suggested that the private sector tends to underinvest in R&D without governmental interventions. The weak protection of intellectual property rights in China makes the problem of underinvestment in R&D even worse. In this situation, it becomes increasingly important for the government to provide incentives such as subsidies on R&D investments, given that R&D investments are critical to the development of new technologies and the sustainable growth of the economy.
In this study I investigate how governmental subsidies on R&D influence Chinese firms’ R&D investments and performance. Specifically, I want to find out (1) whether governmental subsidies promote or hinder firms’ R&D investments, and (2) whether governmental subsidies have differential effects on financial performance across different types of firms. My goal is to better understand the effects of governmental subsidies on Chinese firms. To achieve this goal, I first conduct an extensive review of the relevant literature and then develop a conceptual model about the determinants of governmental subsidies on R&D in China. Next, I conduct empirical analysis using data collected from all the firms listed in the Shanghai Stock Changes and Shenzhen Stock Exchanges during the period of 2009 to 2012. Overall, my findings show that governmental subsidies on R&D have a positive impact on R&D investments by the listed firms. Meanwhile, I find that this positive impact varies significantly across different types of firms, particularly among firms that are still largely owned by the state. I conclude this study with a discussion of its implications for governmental policies on R&D investments.
In this study I investigate how governmental subsidies on R&D influence Chinese firms’ R&D investments and performance. Specifically, I want to find out (1) whether governmental subsidies promote or hinder firms’ R&D investments, and (2) whether governmental subsidies have differential effects on financial performance across different types of firms. My goal is to better understand the effects of governmental subsidies on Chinese firms. To achieve this goal, I first conduct an extensive review of the relevant literature and then develop a conceptual model about the determinants of governmental subsidies on R&D in China. Next, I conduct empirical analysis using data collected from all the firms listed in the Shanghai Stock Changes and Shenzhen Stock Exchanges during the period of 2009 to 2012. Overall, my findings show that governmental subsidies on R&D have a positive impact on R&D investments by the listed firms. Meanwhile, I find that this positive impact varies significantly across different types of firms, particularly among firms that are still largely owned by the state. I conclude this study with a discussion of its implications for governmental policies on R&D investments.
ContributorsYang, Guisheng (Author) / Hwang, Yuhchang (Thesis advisor) / Wang, Tan (Committee member) / Pei, Ker-Wei (Committee member) / Arizona State University (Publisher)
Created2015
Description
State-owned Enterprises (SOE) in China were described as Government Business Enterprises (GBE) in planned economy time. Not only as investor and owner, but also manager, government at that time was an all-powerful role in GBE. All factors of production, such as money, raw materials, production, sell, human affairs, were all decided by administrative orders. After reform and opening up, especially since 90s of last century, some related laws, including The Companies Act, were gradually promulgated and carried out, State-owned Enterprises have been found fairly like modern enterprises in appearance, but observe carefully, you will find that with the growing up of the market mechanism, Non-market mechanism still exists stubbornly during the whole company's actual operation.
This study focus on two cases of State-owned Enterprises, which are administrated by myself. Trying to find out the difference in business efficiency and group cohesiveness, this study examines the effects of the market mechanism and non-market mechanism, which are respectively operated as a pivotal figure in the two companies. Under the background of the social transformation and State-owned Enterprises’ deepen reform, for stimulating the vitality and efficiency of companies, this study tries to find an optimization management model for State-owned Enterprises.
This study focus on two cases of State-owned Enterprises, which are administrated by myself. Trying to find out the difference in business efficiency and group cohesiveness, this study examines the effects of the market mechanism and non-market mechanism, which are respectively operated as a pivotal figure in the two companies. Under the background of the social transformation and State-owned Enterprises’ deepen reform, for stimulating the vitality and efficiency of companies, this study tries to find an optimization management model for State-owned Enterprises.
ContributorsShi, Lei (Author) / Hwang, Yuhchang (Thesis advisor) / Chang, Chun (Thesis advisor) / Chen, Hong (Committee member) / Arizona State University (Publisher)
Created2015