This paper reports on the results of an experiment testing whether the agents selfselect between a competitive payment scheme and a revenue-sharing scheme depending on their inequity aversion. Average efficiency should be increased when these payment schemes are endogenously chosen by agents. We...

This paper examines the effects of board affiliation on the corporate pay gap. Using a sample of Chinese listed firms from 2005 to 2011, we find that boards with a greater presence of directors appointed by block shareholders have lower pay gaps. Furthermore, the governance effects of board...

Ideally, firms should discontinue projects that become unprofitable. Managers, however, continue to operate such projects because of their limited employment horizons and empire-building motivations (Jensen, 1986; Ball, 2001). Prior studies suggest that timely loss recognition in accounting earnings...

This paper presents theoretical analysis of how career concerns and shareholder monitoring affect chief executive officer (CEO) agency costs. We investigate investment efficiency prior to CEO retirement based on a sample of Chinese state-owned enterprises (SOEs) during the 1999-2007 period and...

Annual reports are the main sources of information for outside investors' investment decisions and enable shareholders to supervise the management. Difficulties with the readability of these reports may therefore have serious consequences. Using 19,221 firm-year observations of Chinese A-share...

This study solves the dispute between the free cash flow and tunneling hypotheses in explaining the role of cash dividends on asset expropriation of the controlling shareholders in Chinese listed firms. Investors value more the cash dividends and the cash holdings of firms with lower ownership...

In this paper, we investigate if dividend policy is influenced by ownership type. Within the dividend literature, dividends have a signaling role regarding agency costs, such that dividends may diminish insider conflicts (reduce free cash flow) or may be used to extract cash from firms...