Henry Huang, Quanxi Wang and Xiaonong Zhang
The purpose of this paper is to investigate whether managerial ownership affects the association between shareholder rights and the cost of equity capital.
Abstract
Purpose
The purpose of this paper is to investigate whether managerial ownership affects the association between shareholder rights and the cost of equity capital.
Design/methodology/approach
Prior literature has shown that strong shareholder rights are associated with a lower level of cost of equity capital. This paper empirically tests the interaction between managerial ownership and shareholder rights on affecting the cost of equity capital, using Gompers et al.'s governance score and Ohlson and Juettner‐Nauroth's estimate of cost of equity capital. To mitigate the endogeneity arising from other governance variables affecting both shareholder rights and the cost of equity capital, the paper adopts both OLS and two‐stage regression.
Findings
The results indicate that managerial ownership aligns managers' interests with those of shareholders, leading to a lesser degree of agency problems and lower cost of equity capital. Furthermore, the evidence suggests that managerial ownership could substitute for shareholder rights in affecting the cost of equity capital, making strong shareholder rights less important in a high managerial ownership setting.
Research limitations/applications
Findings in this paper suggest that firms need to consider the interaction between managerial ownership and shareholder rights in designing their governance structure to minimize their cost of equity capital.
Originality/value
This paper reveals the interaction between two major governance variables in affecting firm valuation.
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Haiyan Qiao, Hao Meng, Wei Ke, Quanxi Gao and Shaobo Wang
To improve the robustness of missile control system and reduce the error, a missile attitude adaptive control method based on active disturbance rejection control technology…
Abstract
Purpose
To improve the robustness of missile control system and reduce the error, a missile attitude adaptive control method based on active disturbance rejection control technology (ADRC) and BP neural network is innovatively proposed.
Design/methodology/approach
ADRC improves the performance of the missile control system by estimating and eliminating the total disturbance of the system. BP neural network adjusts the parameters of ADRC controller according to the state of the system to realize adaptive control. Based on the control system and missile dynamics model, the convergence analysis of the extended state observer and the stability analysis of the closed-loop system after embedding BP neural network are given.
Findings
The simulation results show that the adaptive control method can adjust the coefficient of error feedback rate according to the system input, output and error change rate, which accelerates the response speed of missile attitude angle and reduces the attitude angle error.
Practical implications
BP–ADRC further improves the robustness and environmental adaptability of the missile control system. The BP–ADRC control method proposed in this paper is proved feasible.
Originality/value
Different from the traditional ADRC, the BP–ADRC feedback signal proposed in this paper uses the output signal and its rate of the closed-loop system instead of the system state quantity estimated by extended state observer (ESO). This innovative method combined with BP neural network can make the system output meet the requirements when ESO has errors in the estimation of missile dynamics model.
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Brian Low, Wesley J. Johnston and Jennifer Wang
The purpose of this paper is to establish the importance and approaches in securing an organization's legitimacy from the network community of customers, suppliers and…
Abstract
Purpose
The purpose of this paper is to establish the importance and approaches in securing an organization's legitimacy from the network community of customers, suppliers and manufacturers, including private investors and state‐owned institutions when marketing their products.
Design/methodology/approach
The paper presents an inductive interpretative approach complimented by action‐based research founded on inquiry and testing.
Findings
The paper finds that the key to legitimacy success involves using legitimacy orientations to demonstrate commitment to the interests of constituents, acquiring legitimacy from them, but concurrently considering the central government's influence on a firm's legitimacy performance.
Research limitations/implications
The multiple interactions proposed in this paper remain untested and might have to be modified pending further empirical testing and analysis.
Practical implications
In China's telecommunication market, a company's legitimacy emanates first and foremost from the development and commercialization of innovative and creative technological solutions. This requires good, creative management of technological resource and activity links, connecting the company's technology to network constituents which include local manufacturers, carriers, software developers, investors.
Originality/value
This is the first published paper that examines the proposed interactions among legitimacy orientations, alignments, and performances from a “market‐as‐network” perspective in a dynamic, transitional Chinese telecommunication market.
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Quanxi Li, Haowei Zhang, Kailing Liu, Zuopeng Justin Zhang and Sajjad M. Jasimuddin
There has been limited research that has explored the connection between digital supply chain (DSC) and SC innovation and SC dynamic capabilities. This paper aims to examine the…
Abstract
Purpose
There has been limited research that has explored the connection between digital supply chain (DSC) and SC innovation and SC dynamic capabilities. This paper aims to examine the mediating effect of SC innovation on the relationship between DSC and SC dynamic capabilities.
Design/methodology/approach
The research model and hypotheses were tested, employing (Statistical Package of Social Sciences) SPSS 25.0 and (Analysis of Moment Structures) AMOS 24.0 on data drawn from the Chinese manufacturing enterprises.
Findings
The study reveals that DSC has a significant positive effect on SC innovation and SC dynamic capabilities. SC innovation also has a significant positive effect on SC dynamic capabilities. Besides, the authors' research illustrates that SC innovation partially mediates the relationship between DSC and SC dynamic capabilities.
Research limitations/implications
Since the results are derived from the data collected from China, it may not, therefore, be generalized to other settings. Moreover, future research could consider other contextual variables such as “environmental uncertainty” and “Government's Reward-Penalty Mechanism,” which may influence SC dynamic capabilities.
Practical implications
The study provides practical insights for senior executives and managers in the manufacturing industry. Managers should emphasize the investment of advanced digital technologies and tools (DTTs) and improvement of SC visibility and collaboration. In the digital age, companies should pay attention to the introduction of advanced technologies, tools and processes and focus on cultivating an innovative spirit to promote SC dynamic capabilities, thereby enhancing competitive advantages.
Originality/value
The paper illustrates that DSC is of great significance to improving SC dynamic capabilities. This study reveals compelling insights for firms to enhance SC innovation and dynamic capabilities by using DSC as an enabler.
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Quanxi Liang, Leng Ling, Jingjing Tang, Haijian Zeng and Mingming Zhuang
The purpose of this paper is to empirically analyze whether and how managerial overconfidence affects stock price crash risk.
Abstract
Purpose
The purpose of this paper is to empirically analyze whether and how managerial overconfidence affects stock price crash risk.
Design/methodology/approach
Based on a large sample of Chinese non-state-owned firms from 2000 to 2012, this study employs methods including multiple linear regression model, Heckman two-stage treatment effect procedure, firm fixed effects model and event study to clarify the causality relationship between managerial overconfidence and crash risk.
Findings
The authors find that firms with overconfident managers (chief executive officer or board chairs) are more likely to experience future stock price crashes than firms with non-overconfident managers. The effect of overconfidence on crash risk is more pronounced for firms with low transparency, suggesting that firm opacity facilitates overconfident managers’ bad news hoarding activities, which, in turn, increases stock price crash risk. The authors also show evidence that overconfident managers tend to disclose good news in a timely manner.
Originality/value
The authors add to the growing literature on stock price crash risk. Specifically, the authors find that the cognitive bias of board chair plays an important role in the bad news hoarding activities, thereby increasing the likelihood of stock price crash. This study also contributes to the literature that addresses the effects of managerial overconfidence on corporate finance issues.
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Stanley Bruce Thomson, William X. Wei and Phillip Swallow
Considering the importance of China as a global economic power and the emphasis placed on human resources in a knowledge economy, the findings of no less than 30 articles on…
Abstract
Purpose
Considering the importance of China as a global economic power and the emphasis placed on human resources in a knowledge economy, the findings of no less than 30 articles on diversity management in that country seem inadequate given the growing importance of diversity in the workplace. Analysis of those articles reveals that most of the research focuses on firms located on the eastern coast. Moreover, while cataloging the types of industry and ownership covered provides a broad overview, specific industries and ownership types require further examination.
Methodology
Searches were conducted in both English and Chinese databases using the keyword search phrase of “diversity management and China”. The criteria for including an article were as follows: 1) an emphasis on diversity management within the business environment; 2) a focus on applications of diversity management within the People’s Republic of China, thus excluding Taiwan; and 3) a research-based or conceptual orientation. The search was further limited by using the “abstract” as a limiter under the assumption that if the concepts were important, the author(s) would have used that terminology in the abstract.
Findings
Gender emerged as a major concern along with residential status; racial and ethnic differences, on the other hand, cultural and/or other influences on diversity management received limited attention. Both qualitative and quantitative research methods were used by the various authors, but exploratory methods such as grounded theory saw minimal use. With the little research done on diversity management in China, it is difficult to assess whether or Chinese firms are fully using its available workforce. China must embrace diversity management practices with a view to achieving competitive advantages as well as equality and harmony in the workplace.
Originality/value
This is one of the first published reviews of articles from both Chinese and English databases that delves into the issue of diversity management in China.
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Hong T.M. Bui, Yolanda Zeng and Malcolm Higgs
The purpose of this paper is to explore the relationship between transformational leadership and employees’ work engagement based on fit theory. The paper reports an investigation…
Abstract
Purpose
The purpose of this paper is to explore the relationship between transformational leadership and employees’ work engagement based on fit theory. The paper reports an investigation into the way in which employees’ perceptions of transformational leadership and person-job fit affect their work engagement.
Design/methodology/approach
To test the authors’ hypotheses, the authors performed structure equation modeling with maximum likelihood estimation on Mplus with bootstrapping proposed by Hayes (2009) with data from 691 full-time employees in China.
Findings
The results indicate that transformational leadership has as significant influence on employees’ work engagement as person-job fit in China. Moreover, employees’ perception of person-job fit is found to partially mediate the relationship between transformational leadership and employees’ work engagement.
Research limitations/implications
There is a possible bias arising from the use of cross-sectional data. However, certain methods were implemented to minimize it, including survey design and data analysis.
Practical implications
The paper proposes a number of practical implications for policy makers, HR managers and transformational leaders relating to issues associated with improving levels of employee engagement.
Originality/value
The study contributes to developing leadership and engagement theory by examining a previously unexplored mediator – person-job fit – in a neglected cultural setting. This study promises to open new research avenues in this area.
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Aims to provide the contextual framework for local and foreign manufacturers in assessing the market potential of China's telecommunications equipment market, including an…
Abstract
Purpose
Aims to provide the contextual framework for local and foreign manufacturers in assessing the market potential of China's telecommunications equipment market, including an analysis of contemporary economic, political and historical issues.
Design/methodology/approach
This is an inductive, interpretative case study.
Findings
History matters in the evolution of China's telecommunications market especially given its concern over maintaining control of a strategic interest, as well as the protection of vested interests within the state‐controlled economy.
Originality/value
To practitioners: the importance of research, vis‐a`‐vis interpretation and argument, in assessing market potential in a high‐technology market. To academics: the role of government in the value chain and network especially when they have controlling stakes, as is the case here with China's telecommunications equipment manufacturers and operators.
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Kate Hutchings and Snejina Michailova
The unprecedented escalation in the number of organizations that have decided to internationalize their operations in the last two decades, and the international movement of labor…
Abstract
The unprecedented escalation in the number of organizations that have decided to internationalize their operations in the last two decades, and the international movement of labor that has accompanied such expansion has meant that understanding the process of knowledge sharing within subsidiary operations has become an issue of increasing importance. Where the cultural distance between home and host nations is great, as it is between Western industrialized economies and the transition economies of the (former) Communist nations, there is even greater saliency for achieving effective knowledge sharing if its potential value for gaining organizational competitive advantage is to be harnessed. In examining knowledge sharing in Russia and China, this paper specifically addresses how group membership and personal networking in these countries facilitate and impede knowledge sharing. Ultimately, the paper provides important insights for Western managers about how to work with the national compositions to optimize knowledge sharing in their subsidiary operations in Russia and China.
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Shih Yung Chou, Wenkai Yang and Bo Han
The purpose of this paper is to develop a theoretical model describing psychological states and behavioral outcomes experienced and exhibited by older generation interpersonal…
Abstract
Purpose
The purpose of this paper is to develop a theoretical model describing psychological states and behavioral outcomes experienced and exhibited by older generation interpersonal helping behavior (IHB) recipients in Chinese organizations.
Design/methodology/approach
The paper draws upon relevant literature and develops a theoretical model.
Findings
The analysis suggests that the extent of IHB that older generation Chinese employees receive from younger generation employees will lead to loss of mianzi, which will then result in reduced perceived generational guanxi, increased intended social isolation, and reduced intention to share task-related knowledge with the younger generation employees. The paper also proposes that perceived generational guanxi and intended social isolation will mediate the relationship between loss of mianzi and intention to share task-related knowledge with younger generation employees.
Practical implications
Because mianzi is an important cultural feature in Chinese societies, this paper provides four implications. First, younger generation employees could preserve and/or enhance older generation employees’ mianzi using less powerful messages. Second, younger generation employees should initiate task behaviors involving seeking opinions and expertise from older generation employees before exhibiting IHB. Third, mangers could reduce the negative impact of generational differences by establishing generational mentoring relationships between younger and older generation employees. Finally, younger generation employees could preserve and/or enhance older generation employees’ mianzi by playing the role of an informal subordinate rather than a problem solver when exhibiting IHB.
Originality/value
This paper is the first study exploring consequences of IHB from the perceptive of older generation IHB recipients in the Chinese context.