Louis T. W. Cheng

The Dynamics of Guanxi and Ethics for Chinese Executives

This study empirically examines how Chinese executives perceive the role of guanxi and ethics played in their business operations. By factor-analyzing 850 valid replies collected from a comprehensive survey, the present study identifies three distinct ethics-related attitudes and two distinct guanxi-related attitudes for Chinese executives. The cluster analysis of the composite scores of these five attitudinal factors further indicates the existence of three distinct groups of Chinese executives that vary in their ethics and guanxi orientations. The three groups are unethical profit seeker (UPS), anti-governance, guanxi-cultivator (AGGC), and apathetic executive (AE). The three groups are also found to be significantly different in such demographic characteristics as age and the ownership structure of the serving organization. Specifically, the inter-group comparison suggests that younger Chinese executives, and those working for privately-owned firms and joint ventures are more inclined to engage in unethical activities for profits. These findings provide useful insights for international investors to formulate their human resource and negotiation strategies in China.

Key Executive Succession and Stockholder Wealth: The Influence of Successorys Origin, Position, and Age

This study uses event time methodology to test the reaction of the stock market to announcements of the appointments of 367 key executive officers in a sample of 1986 Fortune 500 companies. We found significant, positive market reactions for the total top management sample. In addition, we found differences for successors origin, position, and age at the time of appointment. The results highlight the importance of specifying the conditions under which succession will have its different effects.

Publications in Major Marketing Journals: An Analysis of Research Productivity of Asia-Pacific Universities

The authors examine the marketing research productivity of Asia-Pacific universities using a set of 20 marketing journals during 1991-2000. A weighted Journal of Marketing-equivalent page count is used to account for different font and page sizes of the journals, different lengths in articles, coauthorships, and affiliations. A total of 106 universities are evaluated. The top 3 universities are, in order, the University of NewSouth Wales, the National University of Singapore, and Hong Kong University of Science and Technology. School history does not seem to relate to research productivity. Indeed, several prominent universities are not ranked as highly as other more recently established ones. In achieving publication, the degree of research emphasis and research strategy of a university might play a more important role than years of operation. A majority of the top 20 Asia-Pacific universities have made significant progress in research output during 1991-2000.

A ranking of accounting research output in the European region

Abstract This study provides a ranking in accounting research output in Europe during 1991-2002. We use a set of 19 accounting journals to rank accounting programmes for 253 European universities. UK universities are overwhelmingly represented in the top ranking. Over the entire period, the top three universities are the University of Manchester. London School of Economics and the University of Edinburgh. Some leading European accounting programmes made good progress in research output during the 12-year period. The distribution of publication is highly skewed. The top-5, top-10, and top-25 universities account for 21%, 30%. and 54% of the total weighted number of articles, respectively.

Target Firm Returns: Does the Form of Payment Affect Abnormal Returns?

Research indicates that at the time of a takeover announcement, target firm shareholders receiving cash earn larger abnormal returns than those receiving stock. Our work confirms that cash targets receive larger direct payments from bidders and that the size of target firm abnormal returns is related to the relative size of this direct payment. Once we control for the size of the payment, however, we find the target firm abnormal returns to be unrelated to the payment method. Thus the relationship between payment method and target firm abnormal returns is indirect. This finding is important because it casts doubt on the signaling (asymmetric information) hypothesis. That is, cash offers do not seem to be valued by the market as a means of reducing this uncertainty. Something else, such as the tax implication differences between cash and stock offers, drives cash target firms to demand larger payments from bidding firms. Copyright Blackwell Publishers Ltd 1997.

Dividend preference of tradable-share and non-tradable-share holders in Mainland China

Comprehensive data on corporate announcements of Chinese firms allows us to examine the preference for, and determinants of, cash and stock dividends. The results indicate that Chinese public investors prefer stock dividends over cash dividends, which are preferred by large state and legal person shareholders generally. Stock dividends, which do not require an explicit cash outflow from a firm, are found to be positively related to higher earnings, supporting the signalling hypothesis of dividend policy. In an imperfect market, these results have some implications for government regulation of financial markets.

Pricing dynamics of index options and index futures in Hong Kong before and during the Asian financial crisis

This article studies the impact of the Asian financial crisis on index options and index futures markets in Hong Kong. We employed a time‐stamped transaction data set of the Hang Seng Index options and futures contracts that were traded on the Hong Kong Futures Exchange. The results show that during the crisis period, the arbitrage profits, and the standard deviations of these profits increased in both ex‐post and ex‐ante analyses. In a market turbulent time, market volatility brings a higher arbitrage profit level. However, despite the increased market volatility, the profitability of the arbitrage trades declined substantially with longer execution time lags in the ex‐ante analysis. This suggests that the HSI futures and options markets are mature and resilient. A multiple regression analysis on the ex‐post arbitrage profit also suggests that there were structural changes during the Asian financial crisis and the Hong Kong government intervention periods.

An examination of the determinants of stock price effects of US–Chinese joint venture announcements

This paper examines the announcement effects of US-Chinese joint ventures and explores several firm-specific factors which may affect the size of the abnormal returns. A sample of 103 joint ventures during the 1973-1993 period and eight variables, including current ratio, debt ratio, total asset turnover ratio, return on equity, industry classification, prior experience in China, location of headquarters and the date of the joint venture announcement, are used in the study. A significant 3-day cumulative abnormal return of 1.02% is found in the total sample. However, sub-sample and regression analyses show that none of the factors influence the size of the abnormal gains.

Corporate Performance Implications of Relational Demographic Differences: On Age and Titles of Chairpersons Versus General Managers of Listed Chinese Companies

By analysing archival data of 5451 Chinese listed companies, this investigation offers insights into how the relational demographic differences between the highest ranking executives (chairperson and general manager) may affect corporate performance in a Chinese cultural context. Overall, the findings derived from the regression analyses reveal that, for status-laden demographic attributes such as age and title possession, relational-norm-consistent demographic differences lead to better corporate performance. In addition, the findings highlight that relational demographic homogeneity in terms of title possession also boosts corporate performance. Furthermore, this investigation provides empirical evidence for the significant moderating effect of industry sales growth on the relationship between the relational demographic difference in title possession and corporate performance. The finding suggests the importance of adopting a contingent approach to appoint the chairperson and general manager in line with relevant industry conditions.

China's Exchange Traded Fund: Is There a Trading Place Bias?

We use Granger causality tests and an EGARCH model to analyze the pricing relations in the US between two exchange traded funds, the iShares FTSE/Xinhua China 25 Index (FXI) and the S&P 500 Index Fund (IVV). Daily data indicates that Hong Kong home market basically drives the FXI returns in the US. In case of intraday analysis, the US-based IVV appears to dominate the pricing of the FXI. The evidence supports the speculative pricing hypothesis that the location of trading has stronger effects than the influence of domestic effects summarized by FXIs lagged returns.