A matter of time: The influence of underperformance duration on corporate misconduct

IF 4.6 3区管理学 Q1 BUSINESS

Corporate Governance-An International Review Pub Date : 2023-03-29 DOI:10.1111/corg.12526

Amy Tong Zhao, Shufeng Xiao

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引用次数: 0

Abstract

Research Question/Issue

This study examines firms' reactions to the duration of underperformance. We posit that firms are more likely to engage in misconduct to solve the problem of underperformance as the length of time a firm has been underperforming prolongs. Further, we investigate how divergent external governance actors shape underperforming firms' motivation for misconduct and consequently affect their responses to underperformance duration.

Research Findings/Insights

Using bivariate probit estimations for panel data of 2662 Chinese publicly listed firms during 2007–2018, we uncover that underperformance duration is positively associated with the likelihood of a corporate misconduct commission. In addition, the positive relationship between the duration of firm underperformance and corporate misconduct is mitigated by the level of state ownership but reinforced by the number of analysts covering the firm.

Theoretical/Academic Implications

This study extends the behavioral theory of the firm by incorporating the construct of underperformance duration from a time perspective, which is a proactive signal of firms' illicit decisions. We show that the duration of underperformance is positively associated with the likelihood of corporate misconduct, which is moderated by the firms' external governance actors who have different time pressures to solve financial problems.

Practitioner/Policy Implications

This study offers insights for regulators interested in the prevention of ex-ant misconduct. Identifying underperformance duration as a critical predictor of illegal activities helps to improve regulators' vigilance. Moreover, a holistic executive evaluation system that shows more tolerance for short-term underperformance is needed.

查看原文本刊更多论文

时间问题：表现不佳持续时间对公司不当行为的影响

研究问题本研究探讨企业对业绩不佳持续时间的反应。我们认为，随着公司业绩不佳时间的延长，公司更有可能采取不当行为来解决业绩不佳的问题。此外，我们还研究了不同的外部治理主体如何影响业绩不佳公司的不当行为动机，进而影响其对业绩不佳持续时间的反应。研究结果/启示通过对 2007-2018 年间 2662 家中国上市公司的面板数据进行双变量 probit 估计，我们发现业绩不佳持续时间与公司不当行为委托的可能性正相关。此外，公司业绩不佳持续时间与公司不当行为之间的正相关关系会因国有股权水平而减弱，但会因覆盖公司的分析师数量而加强。理论/学术启示本研究从时间角度纳入了业绩不佳持续时间的概念，从而扩展了公司行为理论，这是公司非法决策的主动信号。我们的研究表明，业绩不佳持续时间与公司不当行为发生的可能性呈正相关，而公司的外部治理者在解决财务问题时面临不同的时间压力，这对业绩不佳持续时间有调节作用。实践者/政策启示本研究为有志于预防企业不当行为的监管者提供了启示。确定业绩不佳持续时间是非法活动的关键预测因素，有助于提高监管者的警惕性。此外，还需要建立一个全面的高管评价体系，对短期业绩不佳表现表现出更大的容忍度。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Corporate Governance-An International Review Multiple-

CiteScore

7.00

自引率

11.30%

发文量

期刊介绍： The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.