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Article
Publication date: 19 May 2021

Chris Harris and Zhe Li

The purpose of this paper is to identify whether negative operating cash flows are related to investment inefficiency, and specifically whether they are related to…

Abstract

Purpose

The purpose of this paper is to identify whether negative operating cash flows are related to investment inefficiency, and specifically whether they are related to subsequent overinvestment and if this relationship is driven by agency problems within the firm.

Design/methodology/approach

The study conducts fixed effect regressions, testing the relationship between negative operating cash flows and the firm’s subsequent investment inefficiency. The relationship is further examined for all firms based on size, corporate governance and cash holdings – all of which are related to agency problems.

Findings

The proportion of firms reporting negative operating cash flows has been increasing over time and is positively related to subsequent investment inefficiency. This increase is explained not only by the rise in investment of intangible assets. The positive relationship is not explained by the firm size or corporate governance, but is related to cash holdings. These results are consistent across four different measures of firm investment.

Practical implications

The percentage of publicly traded firms with negative operating cash flows has never been higher. This paper is one of the first to identify factors that may be contributing to this rise.

Originality/value

This study extends prior findings by identifying previously unexplored factors related to the rise in firms with negative operating cash flows. The rise in investment of intangible assets does not explain the increase alone. High cash holdings also influence the rise in negative operating cash flows.

Details

Managerial Finance, vol. 47 no. 10
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 29 April 2021

Sarah Taylor Hartsema, Chris Harris, Zhe Li and Thibaut G. Morillon

The purpose of this paper is to identify whether the rise in intangible asset investment is related to trade credit investment and whether this relationship is driven by…

Abstract

Purpose

The purpose of this paper is to identify whether the rise in intangible asset investment is related to trade credit investment and whether this relationship is driven by financial constraint and other firm factors.

Design/methodology/approach

The study conducts fixed effect regressions testing the relationship between trade credit investment and intangible asset levels. The relationship is further examined for all firms based on product type, financial constraint and sales growth.

Findings

There is a negative relationship between investment in trade credit and the level of intangible assets as a proportion of total assets. This negative relationship is largely explained by firms in industries that traditionally utilize more trade credit, firms with financial constraints and firms with low sales growth.

Practical implications

The level of investment in intangible assets continues to rise, while investment in trade credit is declining. This paper is the first to identify whether these trends could be related and to provide some explanation why.

Originality/value

This study is the first to link investment in trade credit with investment in intangible assets. There is a negative relationship that is most pronounced for firms that typically offer more trade credit, that are experiencing financial constraint and that are experiencing low growth.

Details

Managerial Finance, vol. 47 no. 9
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 17 September 2020

Zhe Li and Megan Rainville

The purpose of this study is to examine the relationship between independent director military service and monitoring effectiveness, focusing on chief executive officer…

Abstract

Purpose

The purpose of this study is to examine the relationship between independent director military service and monitoring effectiveness, focusing on chief executive officer (CEO) compensation.

Design/methodology/approach

The authors identify independent directors with military experience using BoardEx data. The authors focus on the level of CEO compensation. The methods used include panel data estimation, propensity score matching analysis and instrumental variable analysis.

Findings

The authors find more powerful CEOs are more likely to appoint independent directors with past military service to the board. Boards with a larger proportion of independent directors with military experience tend to award higher levels of CEO compensation. Moreover, the positive relationship between independent directors with military experience and executive compensation is stronger when the CEO is more powerful.

Originality/value

This paper examines a relatively unexplored director background, directors with military experience, and finds this type of independent director is associated with weak monitoring. The authors contribute to the literature examining the effect of executive and board member military experience on corporations. The authors identify weak monitoring of powerful CEOs as a potential weakness of directors with military experience. This drawback should be considered before appointing a director with military experience to the board.

Details

International Journal of Managerial Finance, vol. 17 no. 4
Type: Research Article
ISSN: 1743-9132

Keywords

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Article
Publication date: 1 March 2019

Chris Harris, Scott Roark and Zhe Li

The purpose of this paper is to identify the relation between cash flow volatility and trade credit offered by firms in developing Asian economies.

Abstract

Purpose

The purpose of this paper is to identify the relation between cash flow volatility and trade credit offered by firms in developing Asian economies.

Design/methodology/approach

The study conducts country fixed effect regressions testing the relationship between cash flow volatility and firm investment in trade credit. The relationship is then examined with all firms separated into two groups based on firm size, and then again comparing the relation before and after the 2008 finasncial crisis.

Findings

Higher levels of cash flow volatility are negatively related to the amount of trade credit offered. The negative relationship with cash flow volatility is greater amongst smaller firms that may have less access to external sources of capital. Additionally, the negative relationship is greater following the 2008 financial crisis.

Practical implications

Trade credit plays an important role in the business process, particularly in developing economies. However, these firms may not be able to maintain their investment in trade credit when experiencing greater levels of cash flow volatility. These results are especially pronounced after the 2008 financial crisis and for small firms.

Originality/value

This study identifies an important connection between cash flow volatility and firm investment in trade credit among firms in developing Asian economies.

Details

International Journal of Managerial Finance, vol. 15 no. 2
Type: Research Article
ISSN: 1743-9132

Keywords

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Article
Publication date: 28 August 2021

Zhe Li, Hongpeng Zheng, Li Liu, Fandi Meng, Yu Cui and Fuhui Wang

The purpose of this paper is to investigate the effect of urea–formaldehyde (UF) nanoparticles on the barrier property and delamination resistance for epoxy coating in a…

Abstract

Purpose

The purpose of this paper is to investigate the effect of urea–formaldehyde (UF) nanoparticles on the barrier property and delamination resistance for epoxy coating in a 3.5% NaCl aqueous solution.

Design/methodology/approach

The UF resin was synthesized via sol–gel method, and UF/epoxy composite coating was prepared through ball-milling process; the microstructure and chemical composition of UF resin were observed using the Fourier transform infrared spectroscopy, scanning electron microscopy and transmission electron microscopy; the bonding strength of coating/metal interface was investigated through adhesion test; the mechanical properties of the coatings were studied by tensile tests; and the barrier and corrosion resistance properties were verified using salt spray test, cathodic delamination test and electrochemical impedance spectroscopy measurements.

Findings

The experimental results indicated that the UF resin presented uniformly dispersed nanoparticles in the epoxy matrix and enhanced the bonding strength of coating/metal interface and then improved the delamination resistance for composite coating, which resulted in the enhancement of the barrier property and corrosion resistance for UF/epoxy composite coating.

Originality/value

In this paper, an easily prepared blending compounding coating with excellent corrosion resistance property was synthesized via sol–gel method and ball-milling process. The effects of UF nanoparticles on the barrier property and delamination resistance were investigated in detail.

Details

Anti-Corrosion Methods and Materials, vol. 68 no. 5
Type: Research Article
ISSN: 0003-5599

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Article
Publication date: 9 December 2020

Shengtong Wang, Ouyang Wu, Zhe Li and Bin Wang

Proposing a new type of water-lubricated thrust bearing meets the load-bearing requirements of high-power shaft-less rim driven thrusters.

Abstract

Purpose

Proposing a new type of water-lubricated thrust bearing meets the load-bearing requirements of high-power shaft-less rim driven thrusters.

Design/methodology/approach

The designs were tested by establishing a bearing thermal-fluid-magnetic comprehensive simulation model and developing bearing fluid film force and magnetic simulation. Lubrication performance tests were carried out on the bearing test rig.

Findings

The Halbach array of magnet blocks is able to reach the maximum magnetic force. The material of sheath can help increase the magnetism. The magnetism is able to reduce wear during low-speed and the start-stop phase, while the eddy current loss at high speeds will lead to a decrease in magnetic force. The experiment found that the bearing was more stable at low speeds and would not demagnetize due to the temperature rise, but it is necessary to pay attention to the running stability at high speeds to prevent rubbing and impact.

Originality/value

An innovative combination of hydrodynamic pressure and permanent magnetic repulsion was observed to form a magnetic-liquid double suspension bearing with large bearing capacity.

Peer review

The peer review history for this article is available at: https://publons.com/publon/10.1108/ILT-08-2020-0295

Details

Industrial Lubrication and Tribology, vol. 73 no. 2
Type: Research Article
ISSN: 0036-8792

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Article
Publication date: 17 August 2021

Zhe Li, Emre Unlu and Julie Wu

Studies on corporate boards examine how social ties between the CEO and independent board members affect the effectiveness of board monitoring. Much evidence suggests that…

Abstract

Purpose

Studies on corporate boards examine how social ties between the CEO and independent board members affect the effectiveness of board monitoring. Much evidence suggests that social connections between the CEO and independent directors are associated with inadequate monitoring and lower firm value (Hwang and Kim, 2009; Fracassi and Tate, 2012). In this study, the authors note that social connections of the independent directors are of different nature and thus should not be treated as a homogeneous group; that is, the nature of connections among directors can be quite different from that between the CEO and directors, which is the primary focus of previous studies.

Design/methodology/approach

The authors classify independent directors into four mutually exclusive groups based on their social connections to the CEO and other independent board members and examine what role each type of connection plays in corporate monitoring using panel data and cross-sectional fixed effect regressions.

Findings

The authors find that Only_CEO%, the proportion of independent directors who are connected only to the CEO, is negatively associated with monitoring intensity. Specifically, firms with higher Only_CEO% have larger CEO compensation, lower likelihood of dismissing the CEO, more co-opted board and worse firm performance. In contrast, No_CEO_Ind%, the proportion of independent directors who have no connection to either the CEO or other independent directors is associated with more effective monitoring. These findings suggest that independent directors with different degrees of social connections exhibit different monitoring qualities.

Practical implications

When more independent directors, who are connected exclusively to the CEO, are on the board, they consistently deliver low monitoring quality. However, when more independent directors with no connections to either the CEO or any independent directors are on the board, they enhance monitoring quality. These findings can be used to construct board structures with more effective monitoring ability.

Originality/value

This paper extends the literature on social networks in corporate finance. The authors show that independent directors with exclusive connections to other independent directors do not have a significant effect on board monitoring, but those truly independent directors are associated with better monitoring quality. These findings suggest that different types of social connections of independent directors play a different role in board monitoring and help extend our understanding of the function of social connections of independent directors in corporate governance.

Details

International Journal of Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1743-9132

Keywords

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Article
Publication date: 28 January 2014

Xiu Chen Cravens

The purpose of this paper is to select a theoretical framework for effective school leadership that is connected with research, standards and current practices in the USA…

Abstract

Purpose

The purpose of this paper is to select a theoretical framework for effective school leadership that is connected with research, standards and current practices in the USA, and examine its validity and generalizability cross-culturally.

Design/methodology/approach

The paper uses both qualitative and quantitative methods through expert panel evaluation, cognitive interviews, and field testing of the instrument. The author asks: How well does the Learning-Centered Leadership (LCL) framework align with the professional standards and current practices of principals in urban Chinese schools in the opinion of the experts? Is there evidence that its leadership assessment instrument has construct validity in Chinese urban schools based on the re-examination of its content and measurement criteria? And is there evidence that the instrument is yielding consistent results when taken by the intended participants? How effective are the analytic strategies employed by this study in detecting the equivalences and discrepancies in how educational leadership is defined and evaluated, between two vastly different educational systems?

Findings

The paper finds evidences that give support to the claim that there is strong cross-cultural alignment on the overarching goal of improving student learning. However, the US framework and assessment will need to be modified to reflect the Chinese reform priorities that emphasize the balance between academic and social learning.

Originality/value

The belief that there are common elements in contemporary international educational policy has brought growing interest in sharing leadership theories and successful models cross-culturally. This paper addresses the challenges in understanding the complexity of cross-cultural translation of theories and applications, and explores viable solutions to meaningful adaptation.

Details

Journal of Educational Administration, vol. 52 no. 1
Type: Research Article
ISSN: 0957-8234

Keywords

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Book part
Publication date: 2 September 2009

Victor Nee and Sonja Opper

Market transition theory has specified general mechanisms to explain change in the balance of power between political and economic actors in transition economies. These…

Abstract

Market transition theory has specified general mechanisms to explain change in the balance of power between political and economic actors in transition economies. These mechanisms drive the endogenous construction of informal institutions of a market society; moreover, it is within the context of an ongoing change in relative power that the formal institutions of the emerging market economy arise. The theory makes clear predictions on the declining value of political capital as a consequence of progressive marketization, which incrementally results in transformative change in the direction of more relative autonomy between the political and economic spheres, not dissimilar from established market economies (Kornai, 1995; Evans, 1995; Nee, 2000; Lindenberg, 2000; Ricketts, 2000). In sum, the predicted change in relative power between redistributors and producers explains not only bottom-up entrepreneurial activity, but also the emergence of a market economy in departures from state socialism.

Details

Work and Organizationsin China Afterthirty Years of Transition
Type: Book
ISBN: 978-1-84855-730-7

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Article
Publication date: 27 March 2009

Clyde A. Warden and Judy F. Chen

The purpose of this paper is to extend research on metaphors of consumption to a Chinese cultural setting, specifically examining consumer thoughts related the Chinese…

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Abstract

Purpose

The purpose of this paper is to extend research on metaphors of consumption to a Chinese cultural setting, specifically examining consumer thoughts related the Chinese concept of renao (hot and noisy).

Design/methodology/approach

The Zaltman Metaphor Elicitation Technique (ZMET) was used – a photo elicitation approach and semi‐structured interviews that surfaced metaphors. Field observation and participative techniques were combined with the 14 interviews, in Taiwan, through a grounded theory approach that classified results in categories using the software XSight.

Findings

Five main categories of related concepts consistently arose: food, inexpensive, crowd, marketing communication and servicescape. Respondents closely tied renao with consumption behavior. All five categories resulted in rich descriptions that these consumers, and possibly a wider group, associate with successful retail locations.

Research limitations/implications

This in‐depth approach was limited to 14 respondents and two researchers living in Taiwan. Thus, both the sample and the sample frame are restricted. Although the concept of renao is common in all Chinese cultural settings, its exact interpretation differs in different locations, sub‐cultures and marketing segments.

Originality/value

Consumers expressing their values though consumption is a marketing topic both studied and used in the West. The convergence of consumers' perception of self and consumption is no less important, but certainly different, for consumers in a Chinese cultural setting. Local values heavily influence Chinese consumption in Taiwan, such as the central concept of renao. These local values are rarely discussed in Western literature. Retailers can benefit by incorporating at least some of these metaphors, while marketing researchers can gain an expanded definition of consumer self‐image and values.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 21 no. 2
Type: Research Article
ISSN: 1355-5855

Keywords

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