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Agency problems are more severe for multinational corporations (MNCs) and multinational enterprises compared to their domestic counterparts. As companies develop diversified operations, their managers face more challenges. An incentive compensation structure has been designed to align the benefits of managers with those of shareholders. Additionally, corporate social responsibility (CSR) has become increasingly crucial for companies. MNCs must gain the trust of more investors to improve their corporate reputation and financial performance. CSR enables MNCs with a high sense of social responsibility to expand their investor base, reduce perceived risks, and decrease information asymmetry. Our empirical findings reveal that Taiwanese MNCs can enhance their performance by implementing cash-based compensation and pursuing CSR activities.

This study focuses on listed and over-the-counter (OTC) companies in the Taiwan Stock Exchange. It found that an increase in the ownership proportion of institutional investors (INs), including foreign investors, investment trusts, and dealers can enhance the informativeness of stock prices. The relationship between these factors follows an inverted U-shaped pattern, indicating that excessively high ownership ratios can actually lead to a decrease in the informativeness of stock prices. Additionally, increasing the ownership proportions of foreign investors and investment trusts can reduce the risk of stock price collapse, while dealers show no significant relationship in this regard. This study also reveals that the technical variable of the price deviation rate is an important explanatory factor for post-collapse returns. It is positively correlated with the magnitude of the price decline after a collapse, meaning that stocks with weaker pre-collapse performance experience larger post-collapse declines. When the data during the 2020 pandemic period are excluded, changes in foreign ownership ratios show a significant positive correlation with postcrash returns in both the long and short term. The significant correlation in the short term may be due to a high proportion of foreign ownership. Any reduction in this could put pressure on stock prices, and retail investors may follow suit and sell-off, using foreign investors as a reference. The significant correlation in the long term might be due to foreign investors themselves possibly also trying to avoid the pressure that their own short-term sell-offs could exert on stock prices. The changes in the ownership ratios of investment trusts and dealers indicate that medium and long-term changes have a significant impact on postcrash returns, while the changes in the major players' ownership show no significant correlation. When data from 2020 are included in the analysis, the significance of all INs decreases.

This chapter introduces empirical studies of firm performance and related risk outcomes conducted in the management and finance fields presenting underlying theoretical rationales as they have evolved over time. Early finance studies of market-based returns predominantly found positively skewed return distributions that conform to assumptions about higher returns associated with more risky investments. Subsequent studies found that performance outcomes measured as accounting-based financial returns generally display left-skewed distributions that reflect negative risk-return relationships. This artifact was first observed by Bowman (1980), thus often referred to as the “Bowman paradox” because it contravened the conventional assumptions in finance. The management studies have largely confirmed the inverse risk-return observations but often following rather confined research streams. A contingency perspective inspired by prospect theory and behavioral rationales have investigated the lagged effects of performance on risk outcomes and vice versa. Another stream has focused on the spurious relationships between negatively skewed performance distributions and the inverse risk-return associations. A third approach considered the performance and risk outcomes as deriving from the firms responding in distinct ways to exogenous changes. These studies reach comparable results but underpinned by very different rationales. The finance studies observe deviations from the pure doctrine of positive risk-return associations embedded in the widely adopted capital asset pricing model (CAPM) and note deficiencies with alternative interpretations that even question the validity of CAPM. A more recent strain of studies in behavioral finance observes how many (even professional) investment managers have biases that lead to inverse relationships between perceived risk and return outcomes. While these diverse fields of study have different starting points, they uncover an increasing number of interesting commonalities that can inspire the ongoing search for explanations to observed left-skewed financial returns and negative risk-return correlations across firms.

Corporate misconduct carries significant social and economic costs, and therefore regulators and other stakeholders seek to deter it. Despite the significant costs and deterrence efforts, corporate misconduct is widespread and our understanding of it is limited. As argued in this chapter, one key reason for this is the lack of understanding of the benefits and penalties of misconduct for the companies and individuals involved, as well as the detection of such behavior. This chapter seeks to advance our understanding of corporate misconduct and builds on the rational choice model (RCM) – where the decision to engage in misconduct hinges on a calculation of the expected costs and benefit – and links it to research in organization theory and strategy. Specifically, it sets a research agenda at the intersection of organizational and strategic perspectives, to deepen our understanding of corporate misconduct and shed light on opportunities for empirical and theoretical research which can potentially aid in developing effective deterrence strategies.

Misconduct allegations have been found to not only affect the alleged firm but also other, unalleged firms in form of reputational and financial spillover effects. It has remained unexplored, however, how the number of prior allegations against other firms matters for an individual firm currently facing an allegation. Building on behavioral decision theory, we argue that the relationship between allegation prevalence among other firms and investor reaction to a focal allegation is inverted U-shaped. The inverted U-shaped effect is theorized to emerge from the combination of two effects: In the absence of prior allegations against other firms, investors fail to anticipate the focal allegation, and hence react particularly negatively (“anticipation effect”). In the case of many prior allegations against other firms, investors also react particularly negatively because investors perceive the focal allegation as more warranted (“evaluation effect”). The multi-industry, empirical analysis of 8,802 misconduct allegations against US firms between 2007 and 2017 provides support for our predicted, inverted U-shaped effect. Our study complements recent misconduct research on spillover effects by highlighting that not only a current allegation against an individual firm can “contaminate” other, unalleged firms but that also prior allegations against other firms can “contaminate” investor reaction to a focal allegation against an individual firm.

Scandal is the disruptive publicity of alleged misconduct and it is important for organizations because of its severe consequences. Distinguishing between single-actor scandals, i.e., scandals that result from publicity of misconduct by a single actor, and multiple-actor scandals, i.e., scandals that result from publicity of misconduct of a similar type by multiple actors, we develop a framework for studying scandal dynamics that draws a distinction between how scandals start (single-actor or multiple-actor) and how they end (single-actor or multiple-actor). We focus specifically on spillover scandals (from single to multiple actors) and scapegoating scandals (from multiple to single actors) and identify several mechanisms that affect the likelihood of these two important types of scandals. We conclude by developing a research agenda that builds upon the central contribution of our framework: the distinction between single- and multiple-organization scandals and the transitions that result in spillovers and scapegoating.

This text analyzes the relationship between crises and the dominance of interest-bearing capital, with particular emphasis on fictitious capital, which forms a striking feature of contemporary capitalist economies. It discusses how capitalist crises are commonly viewed and how we should understand them, on several dimensions of reality, based on a comprehensive reading of Marx. We follow with a reflection on the nature and characteristics of interest-bearing capital and on fictitious capital and fictitious profit, given that the high activity of this last form of capital is a hallmark of current capitalism and is itself the maximum expression of the fetishism engendered by it. We conclude that what is understood as a crisis by people in general is, in fact, a source of enormous enrichment for the owners of fictitious capital.

This chapter outlines the major analytical efforts performed as part of the overarching research project with the aim to investigate the organizational and environmental circumstances around the extreme negatively skewed performance outcomes regularly observed across firms. It presents the collection and treatment of comprehensive European and North American datasets where subsequent analyses reproduce the contours of performance distributions observed in prior empirical studies. Key theoretical perspectives engaged in prior studies of performance data and the implied risk-return relationships are presented and these point to emerging commonalities between empirical findings in the management and finance fields. The results from extended analyses of more fine-grained data from North American manufacturing firms uncover the subtle effects of leadership and structural features, and computational simulations demonstrate how the implied adaptive processes can lead to the empirically observed performance distributions. Finally, the findings from the analytical project activities are set in context and the implications of the observed results are discussed to reach at a final conclusion.

Corporate crime is prevalent and imposes enormous costs on society, yet our understanding of its antecedents remains poor, especially in relation to executive characteristics. In this study, we examine the influence of CEO childhood social class on corporate crime. Using a unique data set of CEOs at the largest US corporations, we consider CEO childhood background and develop the argument individuals raised in middle-class families have a greater disposition to commit wrongdoing within the corporations they lead. Specifically, growing up middle-class leaves a lasting status-anxiety imprint, which increases the tendency to engage in corporate crime to preserve or enhance social status. Furthermore, we show two status-anxiety-minimizing factors – Ivy League education and membership in a prominent golf club – weaken the effect of middle-class upbringing on corporate crime. Our findings suggest childhood social class has significant explanatory power for executive behavior and corporate outcomes.

The introduction highlights the historical gender gap in financial empowerment and how Fintech, particularly in the wake of COVID-19, has facilitated financial inclusion for women in India, offering digital solutions to overcome social restrictions. The objective of this chapter is to assess the impact of Fintech on sustainable women empowerment in India. The methodology involves surveying 230 women in Delhi NCR and analyzing factors such as financial literacy, decision-making, financial freedom, security, employability, career growth, and gender equality. The results indicate that Fintech has improved financial awareness and security for women, empowered them in financial decision-making, and fostered professional growth. The implications suggest that the Fintech industry plays a promising role in achieving gender equality by providing women with access to financial instruments, leading to increased economic contribution, personal confidence, and freedom. Fintech has the potential to reduce gender inequality and financial vulnerability at a macro level, empowering women to actively participate in the economy and contributing to sustained gender equality and economic growth.