Are stronger executive incentives associated with cross-listing? Evidence from China
This study examines whether firms incorporated in mainland China benefit from cross-listing in Hong Kong, China. The Hong Kong Stock Market has more stringent rules regarding corporate governance and a better system of investor protection than the mainland market. Hong Kong companies generally provide strong incentives to executives via equity-based compensation. Have cross-listed companies learned from Hong Kong firms about adopting these strong executive incentives? The evidence from this study suggests that changes in top executive compensation are more sensitive to sales growth in cross-listed firms than they are in mainland firms without cross-listing. However, compared to Hong Kong firms, cross-listed firms are less sensitive to stock returns. Further, this study shows that it is necessary to differentiate between state-owned companies and private companies, as cross-listing may have a greater impact on executive incentives in state-owned companies than it does in private companies.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steven N. Kaplan, 1992. "Top Executive Rewards and Firm Performance: A Comparison of Japan and the U.S," NBER Working Papers 4065, National Bureau of Economic Research, Inc.
- Craig Doidge & G. Andrew Karolyi & Rene M. Stulz, 2001.
"Why are Foreign Firms Listed in the U.S. Worth More?,"
NBER Working Papers
8538, National Bureau of Economic Research, Inc.
- Doidge, Craig & Karolyi, G. Andrew & Stulz, Rene M., 2004. "Why are foreign firms listed in the U.S. worth more?," Journal of Financial Economics, Elsevier, vol. 71(2), pages 205-238, February.
- William A. Reese, Jr. & Michael S. Weisbach, 2001.
"Protection of Minority Shareholder Interests, Cross-listings in the United States, and Subsequent Equity Offerings,"
NBER Working Papers
8164, National Bureau of Economic Research, Inc.
- Reese, William Jr. & Weisbach, Michael S., 2002. "Protection of minority shareholder interests, cross-listings in the United States, and subsequent equity offerings," Journal of Financial Economics, Elsevier, vol. 66(1), pages 65-104, October.
- Franklin Allen & Jun Qian & Meijun Qian, 2002.
"Law, Finance, and Economic Growth in China,"
Center for Financial Institutions Working Papers
02-44, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Kato, Takao & Long, Cheryl, 2006.
"Executive Compensation, Firm Performance, and Corporate Governance in China: Evidence from Firms Listed in the Shanghai and Shenzhen Stock Exchanges,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 54(4), pages 945-83, July.
- Kato, Takao & Long, Cheryl, 2005. "Executive Compensation, Firm Performance, and Corporate Governance in China: Evidence from Firms Listed in the Shanghai and Shenzhen Stock Exchanges," IZA Discussion Papers 1767, Institute for the Study of Labor (IZA).
- Taye Mengistae & Lixin Colin Xu, 2004. "Agency Theory and Executive Compensation: The Case of Chinese State-Owned Enterprises," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 615-638, July.
- Aivazian, Varouj A. & Ge, Ying & Qiu, Jiaping, 2005. "Corporate governance and manager turnover: An unusual social experiment," Journal of Banking & Finance, Elsevier, vol. 29(6), pages 1459-1481, June.
- Doidge, Craig, 2004. "U.S. cross-listings and the private benefits of control: evidence from dual-class firms," Journal of Financial Economics, Elsevier, vol. 72(3), pages 519-553, June.
- Chi, Wei & Wang, Yijiang, 2009. "Ownership, performance and executive turnover in China," Journal of Asian Economics, Elsevier, vol. 20(4), pages 465-478, September.
- Firth, Michael & Fung, Peter M.Y. & Rui, Oliver M., 2006. "Corporate performance and CEO compensation in China," Journal of Corporate Finance, Elsevier, vol. 12(4), pages 693-714, September.
- Lang, Mark & Smith Raedy, Jana & Wilson, Wendy, 2006. "Earnings management and cross listing: Are reconciled earnings comparable to US earnings?," Journal of Accounting and Economics, Elsevier, vol. 42(1-2), pages 255-283, October.
- DeFond, Mark L. & Wong, T. J. & Li, Shuhua, 1999. "The impact of improved auditor independence on audit market concentration in China," Journal of Accounting and Economics, Elsevier, vol. 28(3), pages 269-305, December.
- Siegel, Jordan, 2005. "Can foreign firms bond themselves effectively by renting U.S. securities laws?," Journal of Financial Economics, Elsevier, vol. 75(2), pages 319-359, February.
- Mark H. Lang & Karl V. Lins & Darius P. Miller, 2003. "ADRs, Analysts, and Accuracy: Does Cross Listing in the United States Improve a Firm's Information Environment and Increase Market Value?," Journal of Accounting Research, Wiley Blackwell, vol. 41(2), pages 317-345, 05.
- Wang, Qian & Wong, T.J. & Xia, Lijun, 2008. "State ownership, the institutional environment, and auditor choice: Evidence from China," Journal of Accounting and Economics, Elsevier, vol. 46(1), pages 112-134, September.
- Michael Firth & Peter M. Y. Fung & Oliver M. Rui, 2006. "Firm Performance, Governance Structure, and Top Management Turnover in a Transitional Economy," Journal of Management Studies, Wiley Blackwell, vol. 43(6), pages 1289-1330, 09.
- Luzi Hail & Christian Leuz, 2006. "International Differences in the Cost of Equity Capital: Do Legal Institutions and Securities Regulation Matter?," Journal of Accounting Research, Wiley Blackwell, vol. 44(3), pages 485-531, 06.
When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:21:y:2010:i:1:p:150-160. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.