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.

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.

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.

Chinese online literature : creative consumers and evolving business models

Purpose – The internet is transforming possibilities for creative interaction, experimentation and cultural consumption in China and raising important questions about the role that “publishers” might play in an open and networked digital world. The purpose of this paper is to consider the role that copyright is playing in the growth of a publishing industry that is being “born digital”. Design/methodology/approach – The paper approaches online literature as an example of a creative industry that is generating value for a wider creative economy through its social network market functions. It builds on the social network market definition of the creative industries proposed by Potts et al. and uses this definition to interrogate the role that copyright plays in a rapidly-evolving creative economy. Findings – The rapid growth of a market for crowd-sourced content is combining with growing commercial freedom in cultural space to produce a dynamic landscape of business model experimentation. Using the social web to engage audiences, generate content, establish popularity and build reputation and then converting those assets into profit through less networked channels appears to be a driving strategy in the expansion of wider creative industries markets in China. Originality/value – At a moment when publishing industries all over the world are struggling to come to terms with digital technology, the emergence of a rapidly-growing area of publishing that is being born digital offers important clues about the future of publishing and what social network markets might mean for the role of copyright in a digital age.

Principals’ and teacher leaders’ perceptions of their role and interaction under current Chinese reform : a case study in Shandong province

This study aims to explore the perceptions of principals and teacher leaders regarding their roles and the interaction between these roles in Chinese urban primary schools at the time of unprecedented curriculum reform. This involves a complexity of factors such as the influence of globalisation, the impact of traditional Chinese cultural attitudes towards education through Confucianism, and the implementation requirements of the current education reforms. All of these wider contextual factors help to shape the leadership practices that are described in the study. A qualitative exploratory case study approach has been utilised to undertake this investigation. The conceptual framework for this study draws upon scholars‘ work from Western countries but has been adapted in order to address three research questions for the study‘s focus on the context in Shandong province, Mainland China. Three research questions were addressed: First, what are principals‘ perceptions of their leadership roles in Mainland China under current educational reform? Second, what are teacher leaders‘ perceptions of their leadership roles in Mainland China under current educational reform? And finally, what are principals‘ and teacher leaders‘ perceptions of how their roles interact? With reference to the principals in the study, the findings confirm Gurr‘s (2008) comprehensive leadership model relating to four roles, specifically, learning and teaching, symbolic and cultural awareness, future orientation, and accountability. Significantly, some sub-roles that emerge from the data are uniquely Chinese. For example, school culture construction is a very deliberate process in which principals and their staff talked openly about and were involved in creating a positive school climate comprising spiritual, material, and system dimensions. Another finding relates to school feature construction. This refers to the process that principals and staff used to make their schools distinctive and different from other schools and included such features as the school‘s philosophy and the school-based curriculum. In seeking to understand the nature of teacher leadership in Chinese primary schools, this research confirms some findings identified in Western literature. For instance, teacher leaders in Shandong province were involved in decision-making, working with parents and community members, undertaking and planning professional development for staff, and mediating between colleagues (Day & Harris, 2002; Harrison & Killion, 2007; Leithwood, Jantzi, & Steinbach, 1999; Muijs & Harris, 2006; Smylie, 1992). However, some new aspects, such as a heightened awareness of the importance of accountability, emerge from this study. The study‘s conceptual framework also draws upon some significant insights from micropolitics and, in particular, two core constructs, namely cooperation and conflict (Blase, 1991), to explore the interactions between principals and teacher leaders. In this study, principals and teacher leaders employed exchange and facilitation as two strategies in cooperative processes; and they adopted enforcement and compromise in conflictive processes. Finally, the study‘s findings indicate that principals and teacher leaders were developing new ways of interacting in response to the requirements of significant education reform. Most principals were exercising their power through (Blase, 1991) their teacher leaders who in turn, were working in alignment with their principals to achieve the desired outcomes in schools. It was significant that this form of 'parallel leadership' (Crowther, Ferguson, & Ham, 2009) characterised the teacher leadership roles at this period of change to the curriculum in Mainland China.

Automated support for versioning compliance checking between workflow management and product lifecycle management (in Chinese)

With the development of enterprise informatisation, Product Lifecycle Management (PLM) systems have been widely deployed and applied in enterprises. This paper analyzes the requirement that conducting version operations on business objects as specified in process models should be compliant with the versioning policies imposed by product lifecycles. This leads to the introduction of the concept of versioning compliance, and the approach of compliance checking that we proposed in our earlier work, which comprises both syntactical compatibility and behavioural compatibility checking. The paper then focuses on the tool implementation for providing automated support to the versioning compliance checking. An empirical evaluation of the tool was also performed with industrial partners using the well-known questionnaire-based method. The evaluation and feedback from practitioners further evidence the practical significance of this research question in the PLM field and demonstrate that the proposed solution with its automated tool support possesses a high application potential.

Pragmatics, perceptions and strategies in Chinese college English learning

This study investigated Chinese College English students. perceptions of pragmatics, their pragmatic competence in selected speech acts, strategies they employed in acquiring pragmatic knowledge, as well as their general approach to learning English as a foreign language. The research was triggered by a national curriculum initiative that prioritizes the need for College English students to enhance their ability to use English effectively in different social interactions (Chinese College English Education and Supervisory Committee, 2007). The traditional "grammar-translation" and "examination-oriented" method is believed to have reduced Chinese College English students to what is dubbed "mute" and "deaf" language learners (Zhang, 2008; Zhao, 2009). Many students lack pragmatic knowledge on how to interpret discourse by relating utterances to their meanings, understanding the intention of language users, and how language is used in specific settings (Bachman & Palmer, 1996, 2010). There is an increasing body of literature on awareness-raising of the importance of pragmatic knowledge and strategies for classroom instruction. However, to date, researchers have tended to focus largely on the teaching of pragmatics, rather than on how students acquire pragmatic competence (Bardovi-Harlig & Dornyei, 1998; Du, 2004; Hou, 2007; Ruan, 2007; Schauer, 2009). It is this gap in the research that this study fills, with a focus on different types of pragmatic knowledge, learner perceptions of such knowledge, and learning strategies that College English students employ in the process of learning English in general, and pragmatics in particular. Three strands of theories of second language acquisition (Ellis, 1985, 1994): pragmatics (Levinson, 1983; Mey, 2001; Yule, 1996), intercultural communications (Kramsch, 1998; Samovar & Porter, 1997; Samovar, Porter & McDaniel, 2009) and English as a lingua franca (ELF) (Canagarajah, 2006; Firth, 1996; Pennycook, 2010) were employed to establish a conceptual framework for data collection and analyses. Key constructs derived from the three related theories helped to form a typology for a detailed examination and theorization of the empirical evidence gathered from different sources. Four research instruments: a questionnaire (N=237), Discourse Completion Tasks (DCTs) (N=55), focus group interviews (N=18), and a textbook tasks analysis were employed to collect data for this systematic inquiry. Data collected by different instruments were analyzed and compared by way of a triangulation to enhance its validity and reliability. Major findings derived from different sources highlighted that, although College English students were grammatically advanced language learners, they displayed limited pragmatic knowledge and a highly restricted repertoire of language learning strategies. The majority of the respondents, however, believed that pragmatic knowledge was as important as linguistic knowledge in the process of developing communicative competence for interaction in different contexts. It was argued that a combination of a less than sufficient English proficiency, limited knowledge of pragmatics, inadequate language materials and tasks, and a small stock of language learning strategies, were a major hindrance to effective learning and communication, resulting in pragmatic failures in many intercultural communication situations. As the first systematic study of how Chinese College English students learned pragmatics, the research provided a solid empirical base for developing a tentative model for the learning of pragmatics in a College English classroom in China and similar educational contexts. The model was strengthened by a unique combination of theories of pragmatics, intercultural communication and ELF. Findings from this research provided insights into how Chinese College English students perceived pragmatics in the English as foreign language (EFL) curriculum, the processes of learning, as well as strategies they utilized in developing linguistic and pragmatic knowledge and competence.

The acquisition of an artificial logographic script and bilingual working memory : Evidence for L1-specific orthographic processing skills transfer in Chinese-English bilinguals

Studies of orthographic skills transfer between languages focus mostly on working memory (WM) ability in alphabetic first language (L1) speakers when learning another, often alphabetically congruent, language. We report two studies that, instead, explored the transferability of L1 orthographic processing skills in WM in logographic-L1 and alphabetic-L1 speakers. English-French bilingual and English monolingual (alphabetic-L1) speakers, and Chinese-English (logographic-L1) speakers, learned a set of artificial logographs and associated meanings (Study 1). The logographs were used in WM tasks with and without concurrent articulatory or visuo-spatial suppression. The logographic-L1 bilinguals were markedly less affected by articulatory suppression than alphabetic-L1 monolinguals (who did not differ from their bilingual peers). Bilinguals overall were less affected by spatial interference, reflecting superior phonological processing skills or, conceivably, greater executive control. A comparison of span sizes for meaningful and meaningless logographs (Study 2) replicated these findings. However, the logographic-L1 bilinguals’ spans in L1 were measurably greater than those of their alphabetic-L1 (bilingual and monolingual) peers; a finding unaccounted for by faster articulation rates or differences in general intelligence. The overall pattern of results suggests an advantage (possibly perceptual) for logographic-L1 speakers, over and above the bilingual advantage also seen elsewhere in third language (L3) acquisition.

Educational stress among Chinese adolescents : measurement, risk factors and associations with mental health

Academic pressure among adolescents is a major risk factor for poor mental health and suicide and other harmful behaviours. While this is a worldwide phenomenon, it appears to be especially pronounced in China and other East Asian countries. Despite a growing body of research into adolescent mental health in recent years, the multiple constructs within the ‘educational stress’ phenomenon have not been clearly articulated in Chinese contexts. Further, the individual, family, school and peer influencing factors for educational stress and its associations with adolescent mental health are not well understood. An in-depth investigation may provide important information for the ongoing educational reform in Mainland China with a special focus on students’ mental health and wellbeing. The primary goal of this study was to examine the relative contribution of educational stress to poor mental health, in comparison to other well-known individual, family, school and peer factors. Another important task was to identify significant risk factors for educational stress. In addition, due to the lack of a culturally suitable instrument for educational stress in this population, a new tool – the Educational Stress Scale for Adolescents (ESSA) was initially developed in this study and tested for reliability and validity. A self-administered questionnaire was used to collect information from convenient samples of secondary school students in Shandong, China. The pilot survey was conducted with 347 students (grades 8 and 11) to test the psychometric properties of the ESSA and other scales or questions in the questionnaire. Based on factor analysis and reliability and validity testing, the 16-item scale (the ESSA) with five factors showed adequate to good internal consistency, 2-week test-retest reliability, and satisfactory concurrent and predictive validity. Its factor structure was further demonstrated in the main survey with a confirmatory factor analysis illustrating a good fit of the proposed model based on a confirmatory factor analysis. The reliabilities of other scales and questions were also adequate to be used in this study. The main survey was subsequently conducted with a sample of 1627 secondary school (grades 7-12) students to examine the influencing factors of educational stress and its associations with mental health outcomes, including depression, happiness and suicidal behaviours. A wide range of individual, family, school and peer factors were found to have a significant association with the total ESSA and subscale scores. Most of the strong factors for academic stress were school or study-related, including rural school location, low school connectedness, perceived poor academic grades and frequent emotional conflicts with teachers and peers. Unexpectedly, family and parental factors, such as parental bonding, family connectedness and conflicts with parents were found to have little or no association with educational stress. Educational stress was the most predictive variable for depression, but was not strongly associated with happiness. It had a strong association with suicide ideation but not with suicide attempts. Among five subscales of the ESSA, ‘Study despondency’ score had the strongest associations with these mental health measures. Surprising, two subscales, ‘Self-expectation’ and ‘Worry about grades’ showed a protective effect on suicidal behaviours. An additional analysis revealed that although academic pressure was the most commonly reported reason for suicidal thinking, the occurrence of problems in peer relationships such as peer teasing and bullying, and romantic problems had a much stronger relationship with actual attempts. This study provides some insights into the nature and health implications of educational stress among Chinese adolescents. Findings in this study suggest that interventions on educational stress should focus on school environment and academic factors. Intervention programs focused on educational stress may have a high impact on the prevalence of common mental disorders such as depression. Efforts to increase perceived happiness however should cover a wider range of individual, family and school factors. The importance of healthy peer relationships should be adequately emphasised in suicide prevention. In addition, the newly developed scale (the ESSA) demonstrates sound psychometric properties and is expected to be used in future research into academic-related stress among secondary school adolescents.

Educational stress among Chinese adolescents : individual, family, school and peer influences

Educational stress is common among school children and adolescents, especially in Asian countries. This study aims to identify factors associated with perceived educational stress among students in China. A cross-sectional questionnaire survey was conducted with 1627 students (Grades 7–12) from six secondary schools in rural and urban areas of Shandong Province. A wide range of individual, family, school and peer factors were associated with stress measured using the Educational Stress Scale for Adolescents (ESSA). Rural school location, low school connectedness, perceived poor academic grades, female gender, older age and frequent emotional conflicts with teachers and peers were among the strongest correlates, and most of them are school- or study-related. Unexpectedly, family and parental factors were found to have little or no association with children’s perceived educational stress. These findings may offer directions for interventions in secondary school settings.

Provincialising Perth? : Satellite television and the Chinese in Perth

Relocated people habitually seek the familiar within their new social milieus as a means of easing their transition into ways strange and alien. However, from networks and food to everyday customs, efforts to hold on to such home comforts are often viewed with a measure of hostile disdain and regarded as preludes to the formation of ethnic enclaves. Through a pilot study on the access of satellite television by mainland Chinese migrants in Perth, Western Australia, this chapter seeks to shed some light on how migrants understand and employ these comforting strategies and how Chinese-Australians are using technology to achieve a sense of sanctuary from the views and habits of Australians while (re)constructing and articulating multiple belongings in their new homes.

Data mining traditional Chinese medicine (TCM) lessons learnt from mining in law and allopathic medicine

Key decisions at the collection, pre-processing, transformation, mining and interpretation phase of any knowledge discovery from database (KDD) process depend heavily on assumptions and theorectical perspectives relating to the type of task to be performed and characteristics of data sourced. In this article, we compare and contrast theoretical perspectives and assumptions taken in data mining exercises in the legal domain with those adopted in data mining in TCM and allopathic medicine. The juxtaposition results in insights for the application of KDD for Traditional Chinese Medicine.