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Article
Publication date: 8 August 2022

Saisai Li, Qianhua Lei and Liuyang Ren

With the development of the economy, an increasing number of listed companies form subsidiaries in China. Though the increase in the number of subsidiaries affects the…

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Abstract

Purpose

With the development of the economy, an increasing number of listed companies form subsidiaries in China. Though the increase in the number of subsidiaries affects the hierarchical structure and risk of conglomerates, few studies relate the hierarchical relationship between the parent company and its subsidiaries to its capital market performance at the conglomerate level. Therefore, this study aims to investigate the relationship between the number of subsidiaries and crash risk.

Design/methodology/approach

Using a sample of all the A-share companies in the Shanghai and Shenzhen stock markets from 2007 to 2015, this study conducts multivariate regression analyses between the number of subsidiaries and the stock price crash risk.

Findings

This study finds an inversed U relationship between the number of subsidiaries and the stock price crash risk, and the above inversed U relationship is steeper in conglomerates with stronger managerial power and less finance distress.

Originality/value

This research has an incremental contribution to the agency problem and governance effect of the parent–subsidiary system in conglomerates. To the best of the authors’ knowledge, this is the first study to show a significant quadratic relationship between the future crash risk and the number of subsidiaries. This paper provides new evidence that the number of subsidiaries has an incremental ability to predict future firm-specific crash risk above other predictors identified by previous research.

Details

Pacific Accounting Review, vol. 35 no. 1
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 7 April 2015

Zhiyun Zou, Peng Liu, Saisai Zhou, Yao Xiao, Xuecai Xu and Jianzhi Gao

The purpose of this paper is to explore the evolving mechanism of urban roadway network. With the consideration of self-organization effect and planning effect during evolution…

546

Abstract

Purpose

The purpose of this paper is to explore the evolving mechanism of urban roadway network. With the consideration of self-organization effect and planning effect during evolution, the authors try to demonstrate the impact of preferential attachment, module scale and module structure on the evolving network model.

Design/methodology/approach

The roadway network is built in the form of abstract network by dual approach. By using the evolving model of modular growth, the authors analyze the effects and mechanism of the evolving process. Then through numerical analysis, the impact of evolving effects on urban roadway network topology structure is discussed from the aspects of preferential attachment, module scale and module structure.

Findings

The module structure property, small-world property and scale-free property of roadway network can be affected with various degrees by the change of preferential attachment and module scale. However, the impact of module structure on network properties is small, which can be ignored. Therefore, in practice, the self-organization effect and planning effect of evolving network can be reached by changing the preferential attachment and module scale, so as to generate the network structure with specific properties.

Research limitations/implications

Some local events, such as road extensions, road demolition and intersection rebuilding, exist during the evolving process under real-world situation. While those cases have not been considered in preferential attachment. Therefore, researchers are encouraged to take these factors into consideration in further research.

Practical implications

The paper has implications for practice in urban transportation planning and roadway constructions, which can help to guide the planning of urban roadway and to adjust or restore partial network when broken down according to the evolving law.

Originality/value

The impact of preferential attachment, module scale and module structure on the evolving network model is measured. And the relationship between different network properties can be used to build some patterns of network. From this point of view, the development of urban roadway network can be predicted and intervened.

Details

Kybernetes, vol. 44 no. 4
Type: Research Article
ISSN: 0368-492X

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