Public enforcement through independent directors

IF 3.2 3区 管理学 Q1 BUSINESS, FINANCE
Xiaoxi Li, Pingui Rao, Yong George Yang, Heng Yue
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引用次数: 0

Abstract

We examine how public enforcement and private enforcement interact to contain self-dealing activities in emerging markets. Using data from China, we find that firms receiving comment letters concerning related party transactions (RPTs) from stock exchanges significantly reduce their RPTs in subsequent years. We further find that (1) the subsequent reduction in RPTs is more pronounced when independent directors have higher career or reputation concerns and (2) independent directors are more likely to dissent or resign if their firms do not significantly reduce RPTs after receiving RPT comment letters, especially if they have high reputation concerns. Our study sheds light on a within-firm mechanism through which public enforcement takes effect. Our empirical findings also illustrate how “sunshine enforcement”—maintaining timely transparency of the enforcement process—can significantly enhance the effectiveness of regulatory programs.

通过独立董事进行公共执法
我们研究了公共执法和私人执法如何相互作用,以遏制新兴市场中的自我交易活动。使用来自中国的数据,我们发现收到证券交易所关于关联交易(rpt)的评论函的公司在随后的年份显著降低了其rpt。我们进一步发现:(1)当独立董事有更高的职业或声誉担忧时,后续的RPT降低更为明显;(2)如果公司在收到RPT评议信后没有显著降低RPT,独立董事更有可能提出异议或辞职,尤其是当他们有很高的声誉担忧时。我们的研究揭示了企业内部的一种机制,通过这种机制,公共执法得以生效。我们的实证研究结果还说明了“阳光执法”——保持执法过程的及时透明度——如何显著提高监管计划的有效性。
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来源期刊
CiteScore
6.20
自引率
11.10%
发文量
97
期刊介绍: Contemporary Accounting Research (CAR) is the premiere research journal of the Canadian Academic Accounting Association, which publishes leading- edge research that contributes to our understanding of all aspects of accounting"s role within organizations, markets or society. Canadian based, increasingly global in scope, CAR seeks to reflect the geographical and intellectual diversity in accounting research. To accomplish this, CAR will continue to publish in its traditional areas of excellence, while seeking to more fully represent other research streams in its pages, so as to continue and expand its tradition of excellence.
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