Governance und Finanzierung

Diese Forschungsgruppe untersucht traditionelle und moderne Ansichten über Corporate Governance auf den Finanzmärkten. Sie trägt dazu bei, die Wirksamkeit verschiedener Governance-Mechanismen bei der Auswahl von Talenten, der Schaffung von Anreizen und der Bindung an das Unternehmen zu verstehen. Die Gruppe untersucht auch, wie verschiedene Stakeholder die Corporate Governance beeinflussen.

Finanzresilienz und Regulierung

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Juniorprofessor Shuo Xia, Ph.D.
Juniorprofessor Shuo Xia, Ph.D.
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Referierte Publikationen


Institutions and Corporate Reputation: Evidence from Public Debt Markets

Xian Gu Iftekhar Hasan Haitian Lu

in: Journal of Business Ethics, im Erscheinen


Using data from China’s public debt markets, we study the value of corporate reputation and how it interacts with legal and cultural forces to assure accountability. Exploring lawsuits that change corporate reputation, we find that firms involved in lawsuits experience a decrease in bond values and a tightening of borrowing terms. Using the heterogeneities in legal and social capital environments across Chinese provinces, we find the effects are more pronounced for private firms, firms headquartered in provinces with low legal protections, and firms headquartered in provinces with high social capital. The results show that lawsuits that allege misconduct are associated with reputational penalties and that such penalties serve as substitutes for legal protections and as complements to cultural forces to provide ex post accountability and motivate ex ante trust.

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CEO Network Centrality and the Likelihood of Financial Reporting Fraud

Salim Chahine Yiwei Fang Iftekhar Hasan Mohamad Mazboudi

in: Abacus, Nr. 4, 2021


This paper investigates the association between CEO’s relative position in the social network and the likelihood of being involved in corporate fraud. Tracing a large sample of US publicly listed firms, we find that CEO network centrality is inversely related to the likelihood of fraudulent financial reporting. We also document a significant spillover effect of financial reporting behaviour from the dominant (most central) CEO to other CEOs in the same social network, suggesting that the ethical corporate behaviour of CEOs is, on average, influenced by that of their dominant CEO in the network. We further find that the role of CEO network centrality in reducing fraud risk is more prominent in firms with lower auditor quality. Overall, our results suggest that network centrality is an important CEO trait that promotes ethical financial reporting behaviour within social networks.

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Stock Liquidity, Empire Building, and Valuation

Sris Chatterjee Iftekhar Hasan Kose John An Yan

in: Journal of Corporate Finance, 2021


We conjecture that high stock liquidity negatively affects firm valuation by inducing inefficient investment. Using takeovers of public targets to study the empire-building motive, we find that a liquid firm is more likely than an illiquid firm to acquire a public firm. Such a takeover by a bidder with higher stock liquidity destroys bidder value to a larger degree. These patterns occur in both stock and cash acquisitions and hold after we use decimalization of tick size as a quasi-exogenous shock to stock liquidity. Finally, we show that financial constraints and corporate governance play important roles in the effects of stock liquidity on empire building in mergers and acquisitions.

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Do Activist Hedge Funds Target Female CEOs? The Role of CEO Gender in Hedge Fund Activism

Bill Francis Iftekhar Hasan Yinjie (Victor) Shen Qiang Wu

in: Journal of Financial Economics, Nr. 1, 2021


Using a comprehensive US hedge fund activism dataset from 2003 to 2018, we find that activist hedge funds are about 52% more likely to target firms with female CEOs compared to firms with male CEOs. We find that firm fundamentals, the existence of a “glass cliff,” gender discrimination bias, and hedge fund activists’ inherent characteristics do not explain the observed gender effect. We also find that the transformational leadership style of female CEOs is a plausible explanation for this gender effect: instead of being self-defensive, female CEOs are more likely to communicate and cooperate with hedge fund activists to achieve intervention goals. Finally, we find that female-led targets experience greater increases in market and operational performance subsequent to hedge fund targeting.

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Executives with Customer Experience and Firm Performance in the B2B Context

Yiwei Fang Cong Feng Iftekhar Hasan Jiong Sun

in: European Journal of Marketing, Nr. 7, 2021


<i>Purpose:</i> This paper aims to examine the presence of an executive with customer experience (ECE) in a supplier firm’s top management team (TMT). The role of ECE presence remains understudied in the marketing literature. This study attempts to examine the relationship between ECE presence and firm performance. <i>Design/methodology/approach:</i> This paper draws on the resource-based view of the firm and adopts a panel firm fixed effects estimator to test the proposed hypotheses. The empirical analysis uses a sample of 1,974 firm-year observations with 489 unique supplier firms. Selection-induced endogeneity is mitigated through the Heckman procedure. <i>Findings:</i> ECE presence improves firm performance. Additionally, firms benefit less from ECE presence if a board member with customer experience (BCE) is also present, if a chief executive officer commands a higher pay slice (compared to other executives), and if a TMT is more functionally diversified. However, ECE presence is particularly beneficial if the overall economy is in contraction. Comparing the functional positions held by ECEs reveals that ECE in the marketing function (as a chief marketing officer) offers the largest benefit to an average supplier firm. ECE presence is also associated with other firm outcomes (e.g. bankruptcy odds, innovation and customer orientation).

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Selection Versus Incentives in Incentive Pay: Evidence from a Matching Model

Shuo Xia

in: SSRN Working Papers, 2018


Higher incentive pay is associated with better firm performance. I introduce a model of CEO-firm matching to disentangle the two confounding effects that drive this result. On one hand, higher incentive pay directly induces more effort; on the other hand, higher incentive pay indirectly attracts more talented CEOs. I find both effects are essential to explain the result, with the selection effect accounting for 12.7% of the total effect. The relative importance of the selection effect is the largest in industries with high talent mobility and in more recent years.

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The Liquidity Premium of Safe Assets: The Role of Government Debt Supply

Qizhou Xiong

in: IWH Discussion Papers, Nr. 11, 2017


The persistent premium of government debt attributes to two main reasons: absolute nominal safety and liquidity. This paper employs two types of measures of government debt supply to disentangle the safety and liquidity part of the premium. The empirical evidence shows that, after controlling for the opportunity cost of money, the quantitative impact of total government debt-to-GDP ratio is still significant and negative, which is consistent with the theoretical predictions of the CAPM with utility surplus of holding convenience assets. The relative availability measure, the ratio of total government liability to all sector total liability, separates the liquidity premium from the safety premium and has a negative impact too. Both theoretical and empirical results suggest that the substitutability between government debt and private safe assets dictates the quantitative impact of the government debt supply.

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Censored Fractional Response Model: Estimating Heterogeneous Relative Risk Aversion of European Households

Qizhou Xiong

in: IWH Discussion Papers, Nr. 11, 2015


This paper estimates relative risk aversion using the observed shares of risky assets and characteristics of households from the Household Finance and Consumption Survey of the European Central Bank. Given that the risky share is a fractional response variable belonging to [0, 1], this paper proposes a censored fractional response estimation method using extremal quantiles to approximate the censoring thresholds. Considering that participation in risky asset markets is costly, I estimate both the heterogeneous relative risk aversion and participation cost using a working sample that includes both risky asset holders and non-risky asset holders by treating the zero risky share as the result of heterogeneous self-censoring. Estimation results show lower participation costs and higher relative risk aversion than what was previously estimated. The estimated median relative risk aversions of eight European countries range from 4.6 to 13.6. However, the results are sensitive to households’ perception of the risky asset market return and volatility.

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