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This study investigates the convergence-of-interest and entrenchment effects on the relationship between managerial ownership and financial distress using evidence from the Chinese stock market. It also analyzes whether the relationship is mediated by research and development (R&D) investment.

Using a dataset consisting of 19,059 firm-year observations of Chinese listed companies in the Shanghai and Shenzhen Stock Exchanges between 2010 and 2020, this study employs both piecewise and curvilinear models.

The results indicate that managerial ownership has a negative association with firm financial distress in both the low (below 12%) and high (above 18%) convergence-of-interest regions of managerial ownership, suggesting that managerial ownership in this region may contribute to improve firm financial status. Meanwhile, managerial ownership has a positive association with firm financial distress in the entrenchment region (12–18%), implying that managerial ownership in the entrenchment region may contribute to impair firm financial status. Furthermore, the results show that R&D investment mediates the association between managerial ownership and financial distress.

This study is the first to provide evidence of a nonlinear relationship between managerial ownership and financial distress, and identify the entrenchment region in the Chinese setting.

This paper addresses the following questions: Why do some firms employ multiple debt types? What explains debt heterogeneity? Is the choice of the source of debt a function of corporate governance?

The author's paper is empirical and uses multiple regression analysis.

Firms under weak corporate governance have a higher propensity to use multiple debt types and have a dispersed debt structure. Contrastingly, firms that are well-managed tend to concentrate debt and borrow predominantly from a few creditors. The author also found that while bank debt is negatively associated with debt concentration, market debt is positively associated with debt concentration.

Firms under weak corporate governance have a higher propensity to use multiple debt types and have a dispersed debt structure. Well-managed firms tend to concentrate debt and borrow predominantly from a few creditors. Bank debt is negatively associated with debt concentration and market debt is positively associated with debt concentration.

Policymakers and practitioners need to account not only for changes in the firm’s total debt level but also for changes within the firm’s debt composition. Understanding a manager’s choice of debt structure can incentivize creditors to effectively monitor and use debt concentration as a form of commitment device that transfers some control rights from the manager to creditors.

While a vast body of corporate finance literature examines the conflict between shareholders and management, there is little empirical work on the conflict between creditors and management. In this paper, the author examines how managerial entrenchment affects debt structure. The results provide a comprehensive picture of how corporate governance influences debt choice(s).

The present study investigates the impact of managerial psychological characteristics on the supply chain management efficiency (SCME) of companies listed in Tehran Stock Exchange.

To this aim, information about 215 companies was analyzed during 2014–2021. The sales per inventory ratio was used to calculate SCME. In the present study, the focus is on characteristics such as managerial entrenchment, managerial myopia, managerial overconfidence (MOC) and managerial narcissism, all considered as managerial attributes.

The present findings showed that managerial myopia/managerial entrenchment (MOC/managerial narcissism) have a negative (positive) effect on SCME. Hypothesis testing based on robustness checks confirmed these results. Moreover, the findings are presented separately for companies with high business strategy (first quarter) and low business strategy (third quarter). The results show that at low levels of differentiation strategy, managerial entrenchment does not have a significant effect on SCME while other managerial attributes have a significant effect on both high and low business strategy.

The present study contributes to the identification of managerial psychological characteristics influencing SCME to advance future studies and support practical efforts. The present findings can prove the significance of this research and fill the existing gap in research.

Research on the effect of executive equity incentives is equivocal. Based on agency theory, some scholars take the convergence of interest logic to highlight the benefits of executive equity incentives. In contrast, others adopt the entrenchment logic to emphasize the increased agency costs. This study attempts to reconcile the debate on executive equity incentives and integrates the opposing views to unveil how executive equity incentives impact corporate social responsibility (CSR) performance.

Using the panel dataset of Chinese A-share listed firms from 2006 to 2022, this study integrates the convergence of interest and entrenchment logic to examine how executive equity incentives affect CSR performance.

We find that the relationship between executive equity incentives and CSR performance follows an inverted U-shaped form. According to the convergence of interest logic, executive equity incentives reduce agency costs when allocating resources to engage in CSR activities and enable firms to increase their CSR investments, ultimately realizing increased CSR performance. After a threshold, however, the accumulation of extensive equity incentives causes the entrenchment effect, resulting in declined CSR performance. Our empirical results also shed new light on its contingent perspective – the inverted U-shaped relationship is attenuated when firms’ stock liquidity is high.

This study attempts to reconcile the debate on executive equity incentives and integrates the opposing views to unveil the inverted U-shaped relationship between executive equity incentives and CSR performance. Our study opens promising avenues for further research on corporate governance and CSR strategies.

The purpose of the study is to examine how operating efficiencies from incentive alignment compensate for rent extraction in family firms. The author asks whether ownership (1) improves operating efficiencies to increase firm value, (2) positively affects related-party transactions (RPTs), or (3) destroys firm value. Finally, the author assesses whether the incentive effect dominates the entrenchment effect.

This study employs a panel of 333 listed family firms (and 185 nonfamily firms) and handles endogeneity using a dynamic panel system GMM and panel VAR.

Ownership decreases discretionary expenses and increases asset utilization to add firm value. The efficiency gains generate more value in family firms, especially majority-held ones, than in nonmajority ones. However, ownership is also related to increased RPTs (especially dubious loans/guarantees), reducing firm value. RPTs destroy value more severely in the family (or group) firms than in nonfamily (nongroup) firms. It could be why ownership's positive impact on value is lower in family firms than in nonfamily firms. Overall, the incentive effect dominates the entrenchment effect and is robust to controlling private benefits of control in the dynamic ownership-value model.

(1) A family firm's ownership may not be optimal. (2) The firm's long-term commitment as a dynasty limits the scale of expropriation yet sustains impetus for long-term value creation. The paradox partly explains why large family holdings and firm-specific investments endure over generations. (3) This way, large ownership substitutes weak investor protection in India despite tunneling as skin in the game provides necessary investor confidence. (4) Future studies can examine whether extraction varies with family generations and how family characteristics affect the incentive effects.

(1) Concentrated ownership may not be a wrong policy choice in emerging markets to draw firm-specific investments. (2) Investors, auditors, or creditors must pay closer attention to loans/guarantees. (3) More vigorous enforcement, auditor scrutiny, and board oversight are needed.

Family firms are not necessarily a bad organization type that destroys investor wealth. They can be valuably efficient due to their ownership and wealth concentration, and frugality. They matter in the economic growth of a developing market like India.

(1) Extends ownership-performance research to family firms and shows that although ownership facilitates tunneling, the incentive effect dominates; (2) family ownership is not impacted by firm value; (3) family ownership levels reduce discretionary expenses and increase asset utilization to create added value, especially in majority-held family firms; (4) RPTs and loans/guarantees increase with ownership; (5) value erosion from RPTs is higher in family (group) firms than in other firms.

The purpose of this paper is to examine the effect of stock price crash risk on the adoption of poison pills.

The authors estimate logit and probit regressions. Their sample includes 185 Brazilian public firms for the period 2010–2018. Following previous studies, the authors use the negative skewness of firm-specific weekly returns and the down-to-up volatility of firm-specific weekly returns as measures of firm's stock price crash risk. As proxies of poison pills, the authors employ the “conventional” poison pills in their baseline models and the “eternity” poison pills, which prevent the removal of poison pills from bylaws, in additional models.

The authors find that stock price crash risk measures are not associated with poison pill adoption. However, although stock price crash risk does not lead to poison pill adoption as a complementary corporate governance mechanism that protects firms against hostile takeover attempts, further results show that managers do not draw on stock price crash risk as a pretext to entrench themselves. Additional analyses also highlight that CEO power seems to play a role in moderating the relationship between stock price crash risk and eternity poison pill adoption.

The authors contribute to the literature on stock price crash risk, which calls for research in international contexts to better understand the effect of stock price crash risk on country-specific idiosyncratic features. The authors discuss a controversial anti-takeover mechanism that has been debated by Brazilian policymakers.

This study mainly aims to explore the impact of management practices and managerial behavioral attributes on credit rating quality in Tehran Stock Exchange.

In this study, 214 firms were assessed from 2014 to 2020. The credit rating quality was measured through Technique for Order of Preference by Similarity to Ideal Solution and the entropy weighting method. In accordance with the theoretical literature, managerial entrenchment, managerial myopia, managerial overconfidence and managerial narcissism were considered as the managerial attributes. Furthermore, to examine management practices, cash flow management and accrual management were explored.

The results of this study showed that the cash flow from operations management and the accrual management has a significant positive effect on the credit rating quality. The managerial entrenchment, managerial narcissism and managerial myopia have significant negative effects on credit rating quality, while the effect of managerial overconfidence on credit rating quality is not significant.

Understanding the factors that affect the credit rating quality is of a great importance. Considering the significance of cash management in the present era and the impact of managerial psychological and behavioral characteristics in the development of the organization, empirical results of this study can help investors, capital market regulators and other stakeholders to strengthen the firm and better decisions.

This paper examines the relationship between poison pills, real earnings management and initial public offering (IPO) failure.

The authors sampled 2,997 IPO firms that went public during 1993-2015.

The authors find that IPO firms manipulate earnings upward using real earnings management. The authors also find that IPO firms exhibiting a higher level of real earnings management have a higher probability of IPO failure. In addition, the authors find that weak shareholders' governance is positively associated with IPO failure.

These results suggest that poor governance structures in failed firms open the door to manipulating real activities and increasing operational risk.

The study findings are of most significant interest to potential investors and other stakeholders affiliated with a firm going public, an auditor, an underwriter, the lawyers who consult with the firm and employees or executives who might consider joining that firm.

This paper aims to examine the effect of family control on corporate anticorruption disclosures of UK publicly listed firms and whether female board directors moderate the latter relationship.

This paper uses Poisson regression analysis for a sample of 1,546 FTSE 350 firm-year observations. Weighted least squares and propensity score matching are then used to assess the robustness of the findings.

The results show that family ownership and involvement are negatively associated with anticorruption disclosures. The tests of moderation indicate that female directors decrease the negative effect of family control on anticorruption disclosures.

To the best of the researcher’s knowledge, this paper is the first to investigate the impact of family control on anticorruption disclosures while taking into consideration the moderating effect of female directors.

This study examines whether managers adopt corporate social responsibility (CSR) disclosures to suppress earnings management practices and whether corporate governance mechanisms could limit such practices.

A quantitative approach was followed, in which secondary data from listed firms from 2014 to 2019 were gathered. Descriptive statistics and inferential techniques were performed, which included correlation, ordered logistic regression and 2SLS panel regression analyses.

The findings indicate that firms use CSR disclosure to conceal managers' opportunistic behaviour via earnings management as an entrenchment strategy and that corporate governance mechanisms could significantly constrain such behaviour.

This study goes beyond the conventional agency theory by incorporating additional theoretical perspectives from stakeholder and legitimacy theories, resulting in a multi-theoretical perspective in conceptualizing the study.

The findings are expected to have significant policy implications, especially in limiting the opportunistic use of CSR disclosures and reducing earnings management practices to safeguard stakeholders' interests and ensure the sustainability of business entities.

The levels of CSR and board governance practices are captured using comprehensive indices. Moreover, earnings management was operationalized using both accrual-based and real earnings management proxies. Furthermore, while addressing an empirical dearth noted, the findings provide significant policy implications for limiting managers' opportunistic and unethical use of CSR disclosures with corporate governance mechanisms.