Search results

Conflicts among top management team (TMT) members have a significant impact on sustainable development of family enterprises in China. The complex attributes of different kinds of conflicts in a TMT have dual effects on firm performance and its stability. Thus, avoiding conflicts in a TMT through a systematic conflict management strategy is very important. This paper aims to therefore investigate how to maximize the performance and income level of the TMT in family enterprises through managing conflict systematically, while adopting the best conflict coping strategies.

In this study, the authors apply conflict coping strategies as a useful tool of conflict management and propose five kinds of dynamic conflict coping strategies among TMT members. Repeated game and multi-agent simulation by computer experiment are used to dynamically simulate the rules and evolution of individual conflict coping strategy choices.

It is found that with the passage of time, different conflict coping strategies have different effects on earnings of individuals and teams at different conflict levels. It is also revealed that conflict coping strategies affect not only the earnings of individuals and teams but also their distribution; it also reflects the conflict level in TMT of a family enterprise but in reverse.

This study contributes to the existing literature on conflict management in relevance to the choice and revolution of conflict coping strategies in a Chinese business culture context. It focuses on strengthening the unity and cooperation of TMT members. Controlling the conflict level of TMT members at a reasonable level, investigating the primary cause of conflict and identifying its nature lead to better performance of the TMT and the sustainable development of Chinese family enterprises. Based on these outcomes, different conflict coping strategies can be appropriately used to solve TMT conflicts.

The authors examine how the major board reforms recently implemented by countries around the world affect firms' choice of debt.

Using a quasi-experimental setting of major board reforms around the world that aim to improve board-related governance practices in various areas, this study investigates the impact of effective board monitoring on corporate debt choice. The authors employ difference-in-differences-type quasi-natural experiment method and path analysis for hypotheses testing.

The authors find that the implementation of board reforms is positively associated with firms' preference for public debt financing over bank debt. However, this effect tends to weaken after the fourth year following the implementation of board reforms. In additional analyses, the authors find that “rule-based” reforms have a more pronounced effect on firms' choice of debt than do “comply-or-explain” reforms. Both (1) strengthened firm-level internal governance practices that address concerns about the agency cost of debt and (2) reduced information asymmetries play important roles in facilitating firms' debt choice, but the evidence suggests that the former is the economic mechanism through which country-level reforms affect corporate debt choice.

The study extends the literature examining the heterogeneity of corporate debt choices in a global setting and the literature on the consequences of corporate governance reforms.

The findings demonstrate the effectiveness of the corporate board reforms implemented in countries around the world, addressing concerns from critics about their potential harm or ineffectiveness.

The results indicate that country-level board reforms reduce the extent to which shareholder–creditor conflicts harm shareholders.

The purpose of this study is to empirically explore the impact of government subsidies for the digital economy on corporate innovation. It aims to determine whether these subsidies promote innovation, and to examine the specific ways in which they inspire corporate innovation.

This study selects Chinese A-share listed companies during the period from 2007 to 2019 as the research object. It employs panel data to empirically examine the impact of government subsidies in the digital economy on corporate innovation.

The findings reveal that government subsidies for the digital economy effectively promote corporate innovation. They significantly increase the number and share of invention patents and improve the quality of corporate innovation. Moreover, it is noted that the positive impact is largely confined to non-state-owned enterprises, small firms and those in highly competitive markets.

The contribution of this paper lies in focusing on government subsidies in the digital economy, which is distinct from the general government subsidies in a broad sense.

This study tests the signaling and tunneling models of dividend policies by examining the relationship between the ownership structure and the dividend payout in a setting where strong institutional governance and weak firm-level governance coexist.

Chinese American Depository Receipts (ADRs) listed in the US offer an excellent opportunity to study dividend policy where strong institutional governance and weak firm-level governance coexist. Using a sample of 161 Chinese ADRs from 2004 to 2018, this study examines the relationship between the firm's ownership structure and cash dividend policy.

This study shows that high levels of controlling shareholder ownership and high levels of state ownership are associated with high dividend payouts. A high level of controlling shareholder ownership has a negative effect on its firm value. Dividend payments in those firms mitigate the negative effect, consistent with the signaling (substitution) model. A high level of state ownership is beneficial to its firm value. However, high dividend payment in those firms decreases the benefit, supporting the tunneling model.

This study covers 161 Chinese ADRs listed in the US with a total market capitalization of over $2 trillion and reveals that dividend tunneling could occur in Chinese government controlled ADRs. Findings in this study would offer valuable insights for US investors and regulators.

This paper extends the tunneling hypothesis to the topic of dividend policy in a setting where strong institutional governance and weak firm-level governance coexist. This study shows that tunneling through dividends can happen among Chinese government controlled ADRs in the US. It also complements the literature by extending the examination of the dividend tunneling model from a relatively small universe of master limited partnership (Atanssov and Mandell, 2018) to a larger universe of Chinese ADRs listed in the US with a total market capitalization over $2 trillion US dollars.

This article sheds light on the missing links concerning the study of using integrated enabling technologies toward sustainable and circular agriculture supply chains by examining the available literature and proposing future research possibilities.

The relevant literature was researched through online databases such as Scopus, Web of Science, Academic Search Premier, Emerald, IEEE Xplore, Science Direct, World Scientific Net and Springer-Link Journals, covering a period from 1999 to 2020. A systematic literature review based on 75 papers analyzed the integration of the concepts of enabling technologies, sustainability, circular economy and supply chain performance in agriculture supply chains.

It was identified that enabling technologies and agriculture supply chains alone have been explored further than integrated enabling technologies, sustainability, circular economy, supply chain performance and agriculture supply chains. Enabling technologies and agriculture supply chains' main findings are: enabling technologies have been studied to improve food safety, food quality and traceability in agriculture supply chains. The main results regarding integrated enabling technologies, sustainability, circular economy, supply chain performance and agriculture supply chains are: Internet of Things and information communication technology play an important role in addressing food security, traceability and food quality, which help achieve sustainable development goals.

This review study provides 13 research questions to underpin future trends regarding integrated technologies' application in agriculture supply chains for circular and sustainable growth.

This paper aims to examine how a firm’s exposure to economic policy uncertainty affects the auditors’ perceptions of financial reporting risk. Firms that are more sensitive to policy uncertainty are predicted to engage in more earnings management because these firms are more likely to experience greater uncertainty in future operations. Audit fees will reflect this reporting risk. On the other hand, auditors might feel more fee pressure from policy-sensitive firms because firms are more inclined to reduce spending in the face of uncertainty and subsequently charge lower fees.

The author tests my hypothesis using U.S. data on audit fees and client characteristics of public companies between the years 2001 and 2021. The author estimates a standard audit fee model based on the audit fee literature (Hay et al., 2006) while also including the two policy sensitivity measures. This study uses panel data methods that allow time-series analyses, providing a powerful setting to test dynamic audit fee adjustment to improve the understanding of the audit market.

The results suggest that audit fee is higher for policy-sensitive firms than for policy-neutral firms. These results are robust to various proxies of policy sensitivity and various specifications designed to mitigate the endogeneity concerns. The study provides assurance that on average, auditor pricing reflects client risk adequately, mitigating the concern that auditors give in to fee pressure and compromise audit quality as a result.

While the findings from this study should be of value to regulators and academics seeking to understand audit activities amid escalating macroeconomic uncertainty, when interpreting these results, several limitations must be considered. The study does not examine how external auditors evaluate risks tied to policy uncertainty. A comprehensive understanding of how and why external auditors respond to heightened policy uncertainty faced by firms could be better achieved through interviews with external auditors and audit committee members. In addition, while this study posits that auditors adjust their approach in response to changes in policy uncertainty, largely due to potential shifts in the risks of material misstatement, there might be additional factors at play that warrant higher audit fees post a change in policy uncertainty. For instance, specific policy changes may give rise to new risks or modify existing ones, thereby precipitating increased scrutiny of records and procedures as company directors’ demand. These aspects offer potential avenues for future research.

This study underscores the significant role of policy sensitivity in determining audit fees and audit quality. Policy-sensitive firms present unique complexities and potential risks that require additional effort and vigilance from auditors. Auditors must develop a specialized understanding of sectors prone to policy fluctuations to navigate these unique challenges effectively. In addition, the role of professional standards boards and regulators in establishing guidelines for auditing policy-sensitive firms cannot be understated. Such guidelines could lead to more consistent audit practices and improved audit quality. Finally, by recognizing and effectively responding to the policy sensitivity of client firms, audit firms can mitigate their own risks, strengthen public trust and enhance the reliability of financial reports.

First, this study adds to an emerging stream of auditing literature that focuses on how audit fees interact with a firm’s external environment by providing evidence of an unexplored implication, a firm-specific policy sensitivity. Second, my main construct, policy sensitivity, provides two distinct advantages over other variables used in prior studies that explore the relationship between audit fees and external firm environments. Third, this study answers the calls for research by De Villiers et al. (2013, p. 3), who identified the cost behavior of audit fees, especially over time, as an area not well understood.

This paper aims to investigate auditors’ pricing of excess cash holdings and the variation in their pricing decisions in light of the precautionary motives of cash holdings and certain firm-specific conditions and during periods of crisis.

The authors conduct the two-stage-least-squares multivariate analysis using a sample of publicly listed non-financial US firms for the period 2003 to 2021 (42,413 firm-year observations).

The findings show a significant positive relationship between excess cash and audit fee. Next, the authors find that audit pricing of excess cash is significantly higher for firms with lower financial constraints. However, the authors do not find evidence to suggest that auditors price excess cash significantly higher for firms with lower hedging needs. In additional analysis, the authors find evidence to suggest that auditors charge significantly less for excess cash in firms that report financial loss and firms operating in industries with high litigation risk. The additional analysis also reveals excess cash is not positively and significantly priced by auditors as a result of the global financial crisis and Covid-19 pandemic.

Most researchers have analyzed excess cash holding from the perspective of managers, i.e. agency conflict or managerial prudence, while somewhat neglecting auditors’ perception of the embedded risk of excess cash holdings. The authors provide new insights on auditors’ perspective of excess cash holding and identify certain factors/situation/conditions that cause variation in the audit fee premium. The findings offer useful insights for managers and shareholders who are interested in assessing the effects of excess cash holdings policies on the audit fee premium.