Helen W Hu

As the debate on convergence and divergence in corporate governance has received considerable research interest, this study aims to explore whether the recently developed independent director systems in China and India could be characterised as convergent or divergent. More importantly, do the independent directors in these two jurisdictions possess the core governance attributes regarded as essential for performing their governance roles effectively? Based on corporate governance guidelines and codes worldwide, four core attributes are identified as influencing the capacity of independent directors to successfully perform their role. A means test (t-test) is used to compare the attributes of independent directors in the largest Chinese and Indian companies. Additionally, these companies are benchmarked against the largest companies in Hong Kong, as they are perceived to have achieved better governance efficiency. Analyses show that while the regulatory development of corporate gove...

Corporate governance literature argues that the board of directors performs three roles: monitoring the corporation, advising and providing services to management, and gaining access to critical resources. Previous empirical studies on IPO outcomes have typically focused on a single board role and/or examined IPOs in a single country. This study examines all three roles in nineteen different countries and demonstrates that all three roles are important for understanding IPO returns.

ABSTRACT Purpose À Stewardship theory is an emergent approach for explaining leadership behavior, challenging the assumptions of agency theory and its dominance in corporate governance literature. This study revisits the agency and stewardship theories by seeking to answer whether chief executive officers (CEOs) in China are committed stewards or opportu-nistic agents. Design/methodology/approach À Based on 5,165 observations of 1,036 listed companies in China over the period 2005À2010, the results suggest that the corporate governance mechanisms developed from the agency theory in the West are not necessarily applicable in the Chinese context. Findings À This study supports the stewardship theory in its findings that empowering CEOs through the practice of CEO duality and longer CEO tenure have a positive effect on firm value in China. Additionally, the positive relationships between CEO duality, CEO tenure and firm Emerging Market Firms in the Global Economy International Finance Review, Volume 15, 255À277 255 value are strengthened by the number of executive directors on the board, and weakened by the number of independent directors on the board. Practical implications À One size does not fit all. Leadership behaviors in China do not follow the agency assumptions inherent in Western prac-tices, rather they favor the conditions of positive leadership expressed by the stewardship theory. Assuming that the motivations of managers in emerging markets such as China are similar to those in the West may lead to a poor fit between governance policies and the institutional context. Originality/value À As one of the few studies to connect the theoretical debate between the agency and stewardship theories, this study presents new evidence to support the stewardship theory, thereby strengthening its theoretical importance and relevance in corporate governance literature.

Resource dependence theorists argue that boards of directors with political capital can benefit focal firms by reducing uncertainty and providing preferential resources. Here, we develop theory regarding the downside of board political capital. As the principal-principal agency problem characterizes many parts of the world, we argue that board political capital can exacerbate this problem by enabling large blockholders to undertake more appropriation of firm wealth. Further, we explore how this enabling effect is moderated by ownership-, industry-, and environment-level contingencies. We find empirical support for our arguments using 32,174 directors in 1,046 Chinese listed firms over the period 2008 – 2011. Our study sheds light on new ways in which resource dependence and agency theories can be integrated to advance the extant research on board governance and corporate political strategy.

Imprinting theory suggests that founding conditions are ‘stamped’ on organizations, and these imprinted routines often resist change.  In contrast, strategic choice theory suggests that the firm can overcome organizational inertia and deliberately choose its future.  Both theories offer dramatically different explanations behind an organization’s capacity for change.  IPO firms provide a unique context for exploring how imprinting forces interact with strategic choice factors to address organizational capacity for change as a firm moves from private to public firm status. Juxtaposing imprinting and strategic choice perspectives, we employ fuzzy set to examine the multi-level determinants of organizational capacity for change. Our cross-national data reveals three effective configurations of organizational capacity for change within IPOs, and two ineffective configurations. Our results suggest that the antecedents of organizational capacity for change in entrepreneurial threshold firms are nonlinear, interdependent, and equifinal.

Prior studies of IPO underpricing, mostly using agency theory and single-country samples, have generally fallen short. In this study, we employ the knowledge-based view (KBV) to explore underpricing across 17 countries. We find that agency indicators are insignificant predictors, board of director knowledge limits underpricing, and external knowledge both substitutes for and complements internal board knowledge. This third finding suggests that future KBV studies should consider how internal and external knowledge states interact with each other. Our study offers new insights into the antecedents of underpricing and extends our understanding of comparative governance and the KBV of the firm.

Drawing together literature on corporate governance, organizational behavior and educational psychology, and using survey data from a sample of 300 Chinese company directors, this study examines the mediating role of director learning goal orientation in linking two widely-acknowledged director social identifications (identification with the organization and identification with executive-agents) and a key director task behavior, namely the monitoring of executive-agents. We also investigate the moderating role of director avoidance orientation in influencing this mediation since a predisposition to avoid loss of ‘face’ is widely posited as having particular relevance in the Chinese context. Results show, firstly, that directors with stronger organizational identification monitor executive-agents more diligently than those with stronger executive-agent identification. Secondly, we find that while learning goal orientation mediates the positive effects of both organizational identification and executive-agent identification on monitoring, the mediated indirect effect of organizational identification on monitoring is stronger than the mediated indirect effect of executive-agent identification on monitoring.  Thirdly, results show that the indirect effects are stronger when director avoidance orientation is low. These findings underscore the importance of director social identification and learning goal orientation in inducing director monitoring in the Chinese context.

What drives firms, particularly those from emerging economies, to engage in competitive catch-up with world leaders? We study the first step leading to catch-up, namely the managerial intent to acquire strategic assets that help closing the gap. Theoretically grounded in the awareness-motivation-capability (AMC) framework of competitive dynamics, we identify key factors contributing to firms’ strategic intent to catch-up by acquiring strategic assets abroad. Using a sample of 154 Chinese firms, we find that firms’ strategic assets seeking intent of foreign direct investment is influenced by their exposure to foreign competition, their governance structure, and relevant financial and managerial capabilities.

This study examines the influence of key corporate governance factors on the internationalization decisions of emerging economy (EE) firms. By integrating the resource-based view and agency theory, it investigates the effects of controlling owner identity, non-controlling shareholder ownership, and the interactions of these with CEO power, in order to reveal their individual and joint effects on the outward foreign direct investment (OFDI) propensity of EE firms. This empirical study of 224 Chinese publicly listed firms found positive effects of ownership of domestic institutional investors and foreign corporations on the OFDI propensity of the firms, which were moderated by the power of the CEOs in these firms.

As the debate on convergence and divergence in corporate governance has received considerable research interest, this study aims to explore whether the recently developed independent director systems in China and India could be characterised as convergent or divergent. More importantly, do the independent directors in these two jurisdictions possess the core governance attributes regarded as essential for performing their governance roles
effectively? Based on corporate governance guidelines and codes worldwide, four core attributes are identified as influencing the capacity of independent directors to successfully perform their role. A means test (t-test) is used to compare the attributes of independent directors in the largest Chinese and Indian companies. Additionally, these companies are benchmarked against the largest companies in Hong Kong, as they are perceived to have achieved
better governance efficiency. Analyses show that while the regulatory development of corporate governance in China and India has been improved, there are still clear distinctions in the core attributes of Chinese and Indian
independent directors.

Corporate governance issues arising from concentrated ownership structure in emerging economies have received growing attention. Adopting a principal–principal perspective, this paper employs structural equation modeling to evaluate the independent and interdependent effects of internal governance mechanisms in enhancing firms’ value in China. Based on a 3-year dataset covering
304 publicly listed companies over 2003–2005, our findings suggest that ownership concentration has the most significant governance effect and has impacted negatively on firm performance. Furthermore, the governance role of the board of directors and supervisory boards is found to have been hindered by ownership concentration, rendering them unable to improve firm performance at present.