Corporate governance mechanisms and earnings management in transitional countries – evidence from Chinese listed firms

The objective of this thesis is to investigate whether the corporate governance practices adopted by Chinese listed firms are associated with the quality of earnings information. Based on a review of agency and institutional theory, this study develops hypotheses that predict the monitoring effectiveness of the board and the audit committee. Using a combination of univariate and multivariate analyses, the association between corporate governance mechanisms and earnings management are tested from 2004 to 2008. Through analysing the empirical results, a number of findings are summarised as below. First, board independence is weakened by the introduction of government officials as independent directors on the boards. Government officials acting as independent directors, claim that they meet the definition of independent director set by the regulation. However, they have some connection with the State, which is the controlling shareholder in listed SOEs affiliated companies. Consequently, the effect of the independent director’s expertise in constraining earnings management is mitigated as demonstrated by an insignificant association between board expertise and earnings management. An alternative explanation for the inefficiency of board independence may point to the pre-selection of independent directors by the powerful CEO. It is argued that a CEO can manipulate the board composition and choose the "desirable" independent directors to monitor themselves. Second, a number of internal mechanisms, such as board size, board activities, and the separation of the roles of the CEO and chair are found to be significantly associated with discretionary accruals. This result suggests that there are advantages in having a large and active board in the Chinese setting. This can offset the disadvantages associated with large boards, such as increased bureaucracy, and hence, increase the constraining effects of a large and resourceful board. Third, factor analysis identifies two factors: CEO power and board power. CEO power is the factor which consists of CEO duality and turnover, and board power is composed of board size and board activity. The results of CEO power show that if a Chinese listed company has CEO duality and turnover at the same time, it is more likely to have a high level of earnings management. The significant and negative relationship between board power and accruals indicate that large boards with frequent meetings can be associated with low level of earnings management. Overall, the factor analysis suggests that certain governance mechanisms complement each other to become more efficient monitors of opportunistic earnings management. A combination of board characteristics can increase the negative association with earnings management. Fourth, the insignificant results between audit committees and earnings management in Chinese listed firms suggests that the Chinese regulator should strengthen the audit committee functions. This thesis calls for listed firms to disclose more information on audit committee composition and activities, which can facilitate future research on the Chinese audit committee’s monitoring role. Fifth, the interactive results between State ownership and board characteristics show that dominant State ownership has a moderating effect on board monitoring power as the State totally controls 42% of the issued shares. The high percentage of State ownership makes it difficult for the non-controlling institutional shareholders to challenge the State’s dominant status. As a result, the association between non-controlling institutional ownership and earnings management is insignificant in most situations. Lastly, firms audited by the international Big4 have lower abnormal accruals than firms audited by domestic Chinese audit firms. In addition, the inverse U-shape relationship between audit tenure and earnings quality demonstrates the changing effects of audit quality after a certain period of appointment. Furthermore, this thesis finds that listing in Hong Kong Stock Exchanges can be an alternative governance mechanism to discipline Chinese firms to follow strict Hong Kong listing requirements. Management of Hong Kong listed companies are exposed to the scrutiny of international investors and Hong Kong regulators. This in turn reduces their chances of conducting self-interested earnings manipulation. This study is designed to fill the gap in governance literature in China that is related to earnings management. Previous research on corporate governance mechanisms and earnings management in China is not conclusive. The current research builds on previous literature and provides some meaningful implications for practitioners, regulators, academic, and international investors who have investment interests in a transitional country. The findings of this study contribute to corporate governance and earnings management literature in the context of the transitional economy of China. The use of alternative measures for earnings management yields similar results compared with the accruals models and produces additional findings.

Chinese driver perceptions about speeding and traffic law enforcement

The World Health Organisation has highlighted the urgent need to address the escalating global public health crisis associated with road trauma. Low-income and middle-income countries bear the brunt of this, and rapid increases in private vehicle ownership in these nations present new challenges to authorities, citizens, and researchers alike. The role of human factors in the road safety equation is high. In China, human factors have been implicated in more than 90% of road crashes, with speeding identified as the primary cause (Wang, 2003). However, research investigating the factors that influence driving speeds in China is lacking (WHO, 2004). To help address this gap, we present qualitative findings from group interviews conducted with 35 Beijing car drivers in 2008. Some themes arising from data analysis showed strong similarities with findings from highly-motorised nations (e.g., UK, USA, and Australia) and include issues such as driver definitions of ‘speeding’ that appear to be aligned with legislative enforcement tolerances, factors relating to ease/difficulty of speed limit compliance, and the modifying influence of speed cameras. However, unique differences were evident, some of which, to our knowledge, are previously unreported in research literature. Themes included issues relating to an expressed lack of understanding about why speed limits are necessary and a perceived lack of transparency in traffic law enforcement and use of associated revenue. The perception of an unfair system seemed related to issues such as differential treatment of certain drivers and the large amount of individual discretion available to traffic police when administering sanctions. Additionally, a wide range of strategies to overtly avoid detection for speeding and/or the associated sanctions were reported. These strategies included the use of in-vehicle speed camera detectors, covering or removing vehicle licence number plates, and using personal networks of influential people to reduce or cancel a sanction. These findings have implications for traffic law, law enforcement, driver training, and public education in China. While not representative of all Beijing drivers, we believe that these research findings offer unique insights into driver behaviour in China.

Social influences on Chinese drivers : cultural context and traffic law enforcement

Reducing road crashes and associated trauma is a critical focus as the Decade of Action for Road Safety commences. China is one of many rapidly-motorizing nations to experience recent increases in private-vehicle ownership and an associated escalation in novice drivers. Unfortunately, however, China also experiences a high rate of death and injury from road crashes. Several key pieces of legislation have been introduced in recent decades in China to deal with these changes. While managing the legal aspects of road use is important, social influences on driver behaviour may offer additional avenues for promoting safe driving, particularly in a culture where such factors carry high importance. To date, there is limited research on the role of social influence factors on driver behaviour in China, yet we know that Chinese society is strongly based on social rules, customs, and relationships. There is reason to assume therefore, that road use and driving-related issues may also be strongly influenced by social relationships. One previous study that has investigated such issues highlighted the need to consider culturally-specific issues such as interpersonal networks and social hierarchy when examining driver behaviour in China (Xie & Parker, 2002). Those authors suggested that there are some concepts relating to Chinese driving culture that may not necessarily have been identified from research conducted in western contexts and that research conducted in China must be considered in light of such concepts. The current paper reports qualitative research conducted with Beijing drivers to investigate such social influence factors. Findings indicated that family members, friends, and driving instructors appear influential on driver behaviour and that some novice drivers seek additional assistance after obtaining their licence. The finding relating to the influence of driving instructors was not surprising, given the substantial number of new drivers in China. In Beijing, driving instruction is conducted off-road in purpose-specific driving facilities rather than on the road network. Once licensed, it is common for new drivers to have little or no experience driving in complex traffic situations. This learning situation is unlikely to provide all the skills necessary to successfully negotiate crowded city streets and assess the related risk associated with such driving. Therefore, it was not surprising to find that one reported strategy to assist new drivers was to employ the services of an ‘accompanying driver’ to provide ongoing driving instruction once licensed. In more highly motorised countries supervised practice is part of a graduated licensing system where it is compulsory for new drivers to be supervised by a more experienced driver for a requisite period of time before progressing to solo driving. However, as this system is not in place in China, it appears that some drivers seek out and pay for additional support once they commence on-road driving. Additionally, strategies to avoid detection and penalties for inappropriate road use were discussed, many of which involve the use of a third person. These findings indicate potential barriers to implementing effective traffic enforcement and highlight the importance of understanding culturally-specific social factors relating to driver behaviour.

State of the art and future challenges for information literacy research

This short paper focuses on strategic issues and important research questions.

Jams, jelly beans and the fruits of passion - art book (26 Pages)

Statement: Jams, Jelly Beans and the Fruits of Passion Let us search, instead, for an epistemology of practice implicit in the artistic, intuitive processes which some practitioners do bring to situations of uncertainty, instability, uniqueness, and value conflict. (Schön 1983, p40) Game On was born out of the idea of creative community; finding, networking, supporting and inspiring the people behind the face of an industry, those in the mist of the machine and those intending to join. We understood this moment to be a pivotal opportunity to nurture a new emerging form of game making, in an era of change, where the old industry models were proving to be unsustainable. As soon as we started putting people into a room under pressure, to make something in 48hrs, a whole pile of evolutionary creative responses emerged. People refashioned their craft in a moment of intense creativity that demanded different ways of working, an adaptive approach to the craft of making games – small – fast – indie. An event like the 48hrs forces participants’ attention onto the process as much as the outcome. As one game industry professional taking part in a challenge for the first time observed: there are three paths in the genesis from idea to finished work: the path that focuses on mechanics; the path that focuses on team structure and roles, and the path that focuses on the idea, the spirit – and the more successful teams put the spirit of the work first and foremost. The spirit drives the adaptation, it becomes improvisation. As Schön says: “Improvisation consists on varying, combining and recombining a set of figures within the schema which bounds and gives coherence to the performance.” (1983, p55). This improvisational approach is all about those making the games: the people and the principles of their creative process. This documentation evidences the intensity of their passion, determination and the shit that they are prepared to put themselves through to achieve their goal – to win a cup full of jellybeans and make a working game in 48hrs. 48hr is a project where, on all levels, analogue meets digital. This concept was further explored through the documentation process. All of these pictures were taken with a 1945 Leica III camera. The use of this classic, film-based camera, gives the images a granularity and depth, this older slower technology exposes the very human moments of digital creativity. ____________________________ Schön, D. A. 1983, The Reflective Practitioner: How Professionals Think in Action, Basic Books, New York

An investigation of unique challenges in National Historic relics and scenic sites (NHRSSs) in Chinese research literature 1982-2008 using co-word analysis

National Housing Relics and Scenic Sites (NHRSSs) in China are the equivalent of National Parks in the West but have contrasting features and broader roles when compared to their Western counterparts. By reviewing and analysing more than 370 academic sources, this paper identifies 6 major issue clusters and future challenges that will influence the management of NHRSSs over time. It also provides a number of cases to illustrate the particular features of NHRSSs. Identifying the hot issues and important challenges in Chinese NHRSSs will provide valuable insights into priorities now being discussed in highly populated areas of the World.

Multimedia search capabilities of Chinese language search engines

This paper reports results from a study exploring the multimedia search functionality of Chinese language search engines. Web searching in Chinese (Mandarin) is a growing research area and a technical challenge for popular commercial Web search engines. Few studies have been conducted on Chinese language search engines. We investigate two research questions: which Chinese language search engines provide multimedia searching, and what multimedia search functionalities are available in Chinese language Web search engines. Specifically, we examine each Web search engine's (1) features permitting Chinese language multimedia searches, (2) extent of search personalization and user control of multimedia search variables, and (3) the relationships between Web search engines and their features in the Chinese context. Key findings show that Chinese language Web search engines offer limited multimedia search functionality, and general search engines provide a wider range of features than specialized multimedia search engines. Study results have implications for Chinese Web users, Website designers and Web search engine developers. © 2009 Elsevier Ltd. All rights reserved.

Exploring regional differences in Chinese consumer acceptance of new mobile technology : a qualitative study

This study examines consumer adoption of 3G mobile technology in China. The qualitative study involved 45 in-depth interviews undertaken in three major Chinese cities to explore the beliefs and attitudes which determine Chinese consumers’ acceptance of the mobile technological innovation. The findings are compared and contrasted against those reported in Western studies. The variations underpinning adoption of 3G between consumers in the three regional cities were identified. Specifically, it was found that the regions differed in terms of the relative importance of the identified adoption determinants, such as perceived social outcomes for using the innovation and the effects of social influence on the adoption. These findings provide subtle insight into the nature of Chinese consumers’ responses to new mobile technologies and a better understanding of variations among regional Chinese consumers.

From the margin to the centre : towards an art strategy for the ethnic enclaves in the city

Sunnybank represents a distinctly Australian take on the classic ‘Chinatown’ – or indeed other ethic community enclaves such as ‘little Italy’, ‘little Bombay’, ‘little Athens’ and so on. In the Northern Hemisphere these tended to grow up in the dense working class neighbourhoods of industrial cities, especially in port cities like Liverpool, London, New York and San Francisco. The existing Chinatowns of Sydney and Melbourne, and to some extent Brisbane’s Fortitude Valley, are of this variety. In the late 1970s, with the growth of suburbanisation and the de-industrialisation and consequent dereliction of the ‘inner city’, these ethnic communities were one of the few signs of life in the city. Apart from the daily commute into the CBD, business with the city council or a trip to the big shopping streets these areas were one of the few reasons for visiting city centres stigmatised by urban decay and petty crime.

The art of re-industrialisation in Shanghai

This paper deals with the development of ‘art clusters’ and their relocation in the city of Shanghai. It first looks at the revival of the city’s old inner city industrial area (along banks of Suzhou River) through ‘organic’ or ‘alternative’ artist-led cultural production; second, it describes the impact on these activities of the industrial restructuring of the wider city, reliant on large-scale real estate development, business services and global finance; and finally, outlines the relocation of these arts (and related) cultural industries to dispersed CBD locations as a result of those spatial, industrial and policy changes.

ArtConnexions series

The exhibition consists of a series of 9 large-scale cotton rag prints, printed from digital files, and a sound and picture animation on DVD composed of drawings, sound, analogue and digital photographs, and Super 8 footage. The exhibition represents the artist’s experience of Singapore during her residency. Source imagery was gathered from photographs taken at the Bukit Brown abandoned Chinese Cemetery in Singapore, and Australian native gardens in Parkville Melbourne. Historical sources include re-photographed Singapore 19th and early 20th century postcard images. The works use analogue, hand-drawn and digital imaging, still and animated, to explore the digital interface’s ability to combine mixed media. This practice stems from the digital imaging practice of layering, using various media editing software. The work is innovative in that it stretches the idea of the layer composition in a single image by setting each layer into motion using animation techniques. This creates a multitude of permutations and combinations as the two layers move in different rhythmic patterns. The work also represents an innovative collaboration between the photographic practitioner and a sound composer, Duncan King-Smith, who designed sound for the animation based on concepts of trance, repetition and abstraction. As part of the Art ConneXions program, the work travelled to numerous international venues including: Space 217 Singapore, RMIT Gallery Melbourne, National Museum Jakarta, Vietnam Fine Arts Museum Hanoi, and ifa (Institut fur Auslandsbeziehungen) Gallery in both Stuttgart and Berlin.

Grounded Media: Expanding the Scope of Ecological Art Practices Within New Media Arts Culture

‘Grounded Media’ is a form of art practice focused around the understanding that our ecological crisis is also a cultural crisis, perpetuated by our sense of separation from the material and immaterial ecologies upon which we depend. This misunderstanding of relationships manifests not only as environmental breakdown, but also in the hemorrhaging of our social fabric. ‘Grounded Media’ is consistent with an approach to media art making that I name ‘ecosophical’ and ‘praxis-led’ – which seeks through a range of strategies, to draw attention to the integrity, diversity and efficacy of the biophysical, social and electronic environments of which we are an integral part. It undertakes this through particular choices of location, interaction design,participative strategies and performative direction. This form of working emerged out of the production of two major projects, Grounded Light [8] and Shifting Intimacies [9] and is evident in a recent prototypical wearable art project called In_Step [6]. The following analysis and reflections will assist in promoting new, sustainable roles for media artists who are similarly interested in attuning their practices.

Educational stress scale for adolescents : development, validity, and reliability with Chinese students

This article describes the development and initial validation of a new instrument to measure academic stress—the Educational Stress Scale for Adolescents (ESSA). A series of cross-sectional questionnaire surveys were conducted with more than 2,000 Chinese adolescents to examine the psychometric properties. The final 16-item ESSA contains five latent variables: Pressure from study, Workload, Worry about grades, Self-expectation, and Despondency, which together explain 64% of the total item variance. Scale scores showed adequate internal consistency, 2-week test–retest reliability, and satisfactory concurrent validity. A confirmatory factor analysis suggested the proposed factor model fits well in a different sample. For researchers who have a particular interest in academic stress among adolescents, the ESSA promises to be a useful tool.

Enhancing Chinese TEFL academics' research performance : necessity and urgency

China’s increasing participation in world affairs and the growing popularity of English as a lingua franca have made significant impact on Chinese society, culture and education. As such, considerable research topics in relation to English require TEFL researchers’ attentions. Additionally, higher education reform in China has created higher demand on academics by stressing research as an important element in academics’ assessment. Recurrent rhetoric in the field of TEFL also calls on practitioners to theorise their practice. All these practical needs and theoretical arguments point to the necessity and significance of TEFL academics’ engagement in research. To find out whether Chinese TEFL academics’ research meet the new demand on them, a survey of TEFL academics at three Chinese higher institutions was conducted. One hundred eighty two of them provided valid responses which were analysed using SPSS. It was found that TEFL academics’ research productivity in each category of research products was quite low. Large percentages of them did not produce any item in the investigated categories of research. They were least productive in conference papers and research products at the national level. However for these least productive categories, there were highly-productive TEFL academics. The categories of research where the TEFL academics were found relatively productive were non-core journal articles and provincial projects. The findings suggest that it is necessary and urgent for Chinese TEFL academics to enhance their research productivity to be able to meet the demand that new era has rendered.