We perform transaction-level analyses of entrusted loans, one of the largest components of shadow banking in China. Entrusted loans involve firms with privileged access to cheap capital channeling funds to less privileged firms, and the increase when credit is tight. Nonaffiliated loans have much higher interest rates than both affiliated loans and official bank loans, and they largely flow into real estate. The pricing of entrusted loans, especially of nonaffiliated loans, incorporates fundamental and informational risks. Stock market reactions suggest that both affiliated and nonaffiliated loans are fairly compensated investments. (C) 2019 Elsevier B.V. All rights reserved.
本文根据 Douglas Cumming，T.Y. Leung，Oliver M. Rui. Gender Diversity and Securities Fraud. Academy of Management Journal, 2015, 1572-1593. 论文翻译而成。刘心洁编译，论文原作者之一芮萌教授对原文进行了适当改写。
Journal of Financial Intermediation
We propose and test a new explanation for forced CEO turnover, and examine its implications for the impact of firm performance on CEO turnover. Investors may disagree with management on optimal decisions due to heterogeneous prior beliefs. Theory suggests that such disagreement may be persistent and costly to firms; we document that this induces them to sometimes replace CEOs who investors disagree with, controlling for firm performance. A lower level of CEO-investor disagreement serves to partially “protect” CEOs from being fired, thus reducing turnover-performance sensitivity, which we also document. We also show that firms are more likely to hire an external CEO as a successor if disagreement with the departing CEO is higher. Disagreement declines following forced CEO turnover. Using various empirical strategies, we rule out other confounding interpretations of our findings. We conclude that disagreement, independently of firm performance, affects forced CEO turnover.
Journal of Financial and Quantitative Analysis
We examine the role of relationship-based resource allocations during the approval process of secondary equity offerings (SEOs) in the Chinese capital market. In this unique regulatory setting, SEO-seeking firms must have their applications approved by an Issuance Examination Committee (IEC) of the China Securities Regulatory Commission (CSRC), a hybrid template between government-directed and market-directed models. We identify guanxi-based relationships as cases in which the partner of an intermediary professional firm (e.g., auditing or law) employed by the SEO applicant also serves on secondment as a full-time IEC member. Our results show that these guanxi-based relationships significantly increase the likelihood of SEO approvals, particularly for suspect SEO applicants with abnormal levels of earnings management, related-party transactions, and inter-company loans. More importantly, we find that guanxi-influenced SEO firms have significantly poorer performance in the post-SEO period, which indicates that it results in inefficient resource allocations. In addition, we show that these quid pro quo arrangements benefit IEC-member intermediaries through higher market shares and professional fee revenues. Overall, our evidence suggests that relationship-based resource allocations lead to negative spillover effects that impose social welfare losses.