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Article
Publication date: 1 April 2021

Hanqing “Chevy” Fang, Yulin Shi and Zhenyu Wu

The authors study the effects of altruism and intention for succession on family firm's reputation risk-taking behaviors in Chinese publicly listed companies.

Abstract

Purpose

The authors study the effects of altruism and intention for succession on family firm's reputation risk-taking behaviors in Chinese publicly listed companies.

Design/methodology/approach

The authors use earnings management as a proxy for reputation risk in family firms, and hand-collected relationship between family members to measure the closeness of incumbent family members and their potential successors as a proxy for the altruistic degree.

Findings

Results show that, in developing countries like China, familial altruism in family firms with succession plans, which does not reduce the practice of earnings management, should be considered by practitioners while detecting it.

Originality/value

The hand collected data are very unique; the authors have focused on the relationship between incumbents and successors and the authors define their closeness by using genes shared between them.

Details

China Finance Review International, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-1398

Keywords

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Article
Publication date: 1 August 2016

Zhenyu Wu, Guang Hu, Lin Feng, Jiping Wu and Shenglan Liu

This paper aims to investigate the collision avoidance problem for a mobile robot by constructing an artificial potential field (APF) based on geometrically modelling the…

Abstract

Purpose

This paper aims to investigate the collision avoidance problem for a mobile robot by constructing an artificial potential field (APF) based on geometrically modelling the obstacles with a new method named the obstacle envelope modelling (OEM).

Design/methodology/approach

The obstacles of arbitrary shapes are enveloped in OEM using the primitive, which is an ellipse in a two-dimensional plane or an ellipsoid in a three-dimensional space. As the surface details of obstacles are neglected elegantly in OEM, the workspace of a mobile robot is made simpler so as to increase the capability of APF in a clustered environment.

Findings

Further, a dipole is applied to the construction of APF produced by each obstacle, among which the positive pole pushes the robot away and the negative pole pulls the robot close.

Originality/value

As a whole, the dipole leads the robot to make a derivation around the obstacle smoothly, which greatly reduces the local minima and trajectory oscillations. Computer simulations are conducted to demonstrate the effectiveness of the proposed approach.

Details

Assembly Automation, vol. 36 no. 3
Type: Research Article
ISSN: 0144-5154

Keywords

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Article
Publication date: 23 September 2013

Xun Li, Hwee Huat Tan, Craig Wilson and Zhenyu Wu

Exit strategies are critical for external private equity holders, such as venture capitalists and business angels, to receive investment returns successfully. The paper…

Abstract

Purpose

Exit strategies are critical for external private equity holders, such as venture capitalists and business angels, to receive investment returns successfully. The paper models the exit decision as a fixed date with the option to exit early, and develop an approach to help private equity holders determine an optimal early exit region based on a target equity value and the time remaining.

Design/methodology/approach

The paper sets up a continuous time model to derive analytical solutions and apply simulations to numerical examples in this study.

Findings

By numerically analyzing the nature of the solution the paper illustrates that a higher return drift of the investee company, a lower return volatility of the investee company, and a higher target return of the private equity holder results a smaller early exit region.

Originality/value

This study helps determine the optimal time of stopping investments, and provides venture capitalists with a usable way to make exit decisions.

Details

International Journal of Managerial Finance, vol. 9 no. 4
Type: Research Article
ISSN: 1743-9132

Keywords

Content available

Abstract

Details

International Journal of Managerial Finance, vol. 9 no. 4
Type: Research Article
ISSN: 1743-9132

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Article
Publication date: 23 September 2013

Douglas Cumming and Sofia Johan

– The purpose of this paper is to study factors that affect the success of technology parks in terms of fostering entrepreneurial firm formation, growth, and financing.

Abstract

Purpose

The purpose of this paper is to study factors that affect the success of technology parks in terms of fostering entrepreneurial firm formation, growth, and financing.

Design/methodology/approach

Based on a new international dataset of technology parks (tech parks) from 13 countries (eight developing countries and five developed countries), the paper relates the success of technology transfer to the legal environment within which the tech park operates, as well as the characteristics of the tenants in the tech park and the services provided by the tech park.

Findings

The data indicate entrepreneurial success is more likely to be facilitated when there is better legal protection offered to companies in the jurisdiction within which the tech park is located, when there is a greater presence of foreign university- and government-affiliated companies in tech parks, and a smaller presence of foreign private companies in tech parks, particularly foreign subsidiaries. The data further indicate entrepreneurial success is more likely when tech park tenants have greater testing/analysis focus, and when tenants have less assembly- and service-focussed activities. Also, entrepreneurial success is more likely to be facilitated by tech parks with on- and off-site technology licensing offices that promote trade shows, provide access to funds for commercialization and distribute information on the R&D outcomes of tech park tenants.

Research limitations/implications

The data offer insights into efficient design of tech parks. Coarse measures from survey data are limitations yet offer scope for further examination in future research.

Originality/value

The paper provides guidance for entrepreneurs and their investors in terms of ways maximize value in terms of entrepreneurial growth and financing from selecting appropriate tech parks.

Details

International Journal of Managerial Finance, vol. 9 no. 4
Type: Research Article
ISSN: 1743-9132

Keywords

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Article
Publication date: 27 February 2009

Xun Li and Zhenyu Wu

Corporate risk management is one of the critical concerns of managers when they make investment allocation decisions among multiple projects. The purpose of this paper is…

Abstract

Purpose

Corporate risk management is one of the critical concerns of managers when they make investment allocation decisions among multiple projects. The purpose of this paper is to address corporate investment issues illustrated by target‐beating in capital budgeting, and further discuss their applications in financial management, especially in venture capital finance.

Design/methodology/approach

Value‐at‐risk, a typical down‐side risk measure which is considered more appropriate for economic agents, is applied to the analysis. Probability theory and optimal control methodologies are used to derive analytical solutions.

Findings

By maximizing the probability of beating a pre‐determined target, an analytical optimal corporate investment allocation strategy is presented, and the corresponding probability and expected earliest time of success derived.

Research limitations/implications

Various types of utility functions of economic agents and other dynamic downside risk measures can be considered in future research along this line.

Practical implications

This paper paves the road for applications of continuous‐time downside risk in making corporate investment decisions, especially in the field of new venture finance.

Originality/value

As one of the early studies investigating optimal investment decisions in continuous‐time downside risk‐based capital budgeting system, this project sheds light on corporate risk management, and provides risk‐averse decision makers with an effective tool.

Details

The Journal of Risk Finance, vol. 10 no. 2
Type: Research Article
ISSN: 1526-5943

Keywords

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Article
Publication date: 27 May 2014

Fan Yang, Craig Wilson and Zhenyu Wu

– The purpose of this paper is to investigate how foreign and domestic investors differ in their beliefs about the relative merits of a firm's political connections.

Abstract

Purpose

The purpose of this paper is to investigate how foreign and domestic investors differ in their beliefs about the relative merits of a firm's political connections.

Design/methodology/approach

These differences are employed to explain cross-sectional variation in the previously documented premium in A-share prices relative to otherwise equivalent foreign currency denominated B-shares for Chinese firms.

Findings

Chinese domestic individual investors were excluded from owning B-shares of Chinese firms prior to February 20, 2001. The authors find that firms with more political connections have higher premiums and a smaller reduction in premiums associated with this event.

Research limitations/implications

This is consistent with domestic block holders deriving additional benefits from politically connected firms.

Practical implications

The findings also have important policy implications by showing that government can have a strong effect on the economy even without applying macro-policy tools.

Social implications

Government ownership in listed companies can result in discrepancies among classes of investors with respect to their valuations. Furthermore, the prohibition of short sales prevents arbitrage from correcting this bias, and eventually the role of the market in allocating resources efficiently is undermined.

Originality/value

The authors investigate the role of political connections as implied by the proportion of state ownership in explaining the A-share premium. Unlike previous studies that associate state ownership with political risk, the paper relates state ownership to political connections that are particularly beneficial to domestic large block shareholders. This interpretation is consistent with the findings and with previous literature on state ownership and political connections of Chinese firms.

Details

International Journal of Managerial Finance, vol. 10 no. 3
Type: Research Article
ISSN: 1743-9132

Keywords

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Book part
Publication date: 19 May 2009

Zhenyu Wu and Jess Chua

Board monitoring should affect a firm's access to debt financing because it improves firm performance and the board is ultimately responsible for the firm's debt. In this…

Abstract

Board monitoring should affect a firm's access to debt financing because it improves firm performance and the board is ultimately responsible for the firm's debt. In this study, we show empirically that access to debt financing indeed benefits in two ways from board monitoring: directly from the monitoring and indirectly from improvement in performance. The methodological challenge is in separating the two effects from each other and from those of other drivers of debt financing.

Details

Corporate Governance and Firm Performance
Type: Book
ISBN: 978-1-84855-536-5

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Article
Publication date: 23 September 2013

Lerong He and Hong Wan

The purpose of this paper is to examine the relationship between IPO lockups and founder-CEOs’ compensation and incentives in newly public firms. The paper argues that…

Abstract

Purpose

The purpose of this paper is to examine the relationship between IPO lockups and founder-CEOs’ compensation and incentives in newly public firms. The paper argues that existence and length of lockup agreements are affected by bargaining power of founders, which will consequently influence the determination of their compensation contracts.

Design/methodology/approach

Multivariate tests are constructed to examine the relationship between IPO lockups and executive compensation. OLS, fixed-effect panel data model, and the Heckman two-stage model are all utilized to conduct the tests.

Findings

The study finds that lockup existence and lockup length are negatively related to founder-CEOs’ total compensation and positively related to founder-CEOs’ equity incentives. The results hold after controlling for the endogenous decision to sign a lockup agreement at the IPO.

Research limitation/implications

The paper's results suggest that the power of founders and other insiders is a crucial factor in the lockup determination process besides economic factors identified in previous studies. The paper's results also echo the political power theory in the management literature which suggests that an organization's decision making is heavily influenced by relative power of organizational members and reflects their preference.

Originality/value

The paper raises a new explanation for the determinant of IPO lockups that supplements the extant theories. The paper argues that existence and length of lockup agreements could be affected by bargaining power of insiders.

Details

International Journal of Managerial Finance, vol. 9 no. 4
Type: Research Article
ISSN: 1743-9132

Keywords

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Article
Publication date: 23 September 2013

Tianshu Zhang and Jun Huang

The purpose of this paper is to observe listed firms in China during the 2008 financial crisis and investigates how group affiliation affects firm value when the economy…

Abstract

Purpose

The purpose of this paper is to observe listed firms in China during the 2008 financial crisis and investigates how group affiliation affects firm value when the economy turns down. The paper focusses the study on answering the following questions: during the crisis, do affiliated firms have higher or lower stock returns than independent firms? Does corporate governance relate to the value of group firms? How does group affiliation influence firm value? Does performance of affiliated entrepreneurial firms differ from affiliated state-owned enterprises (SOEs)?

Design/methodology/approach

The paper uses non-parametric tests and regression analysis on a sample of 1,469 Chinese listed companies to investigate the research questions.

Findings

Affiliated firms have lower stock returns than independent firms by 1.91 percent during September to December of 2008. This poor performance is even worse for firms seriously shocked by the crisis. Good corporate governance can mitigate the negative effects of group affiliation on firm value. The lower valuation of affiliated firms lies in the fact that controlling shareholders undertake more related party transactions at the expense of minority shareholders. Finally, although business groups can provide internal financing for entrepreneurial firms in China, affiliated entrepreneurial firms experience a larger value decrease than affiliated SOEs due to the conflict interest between controlling and minority shareholders.

Originality/value

This research provides unique evidence about the performance of group-affiliated firms during the 2008 financial crisis and documents the mechanisms through which group affiliation influences firm value.

Details

International Journal of Managerial Finance, vol. 9 no. 4
Type: Research Article
ISSN: 1743-9132

Keywords

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