Time-varying herding behavior, global financial crisis, and the Chinese stock market

In this paper, we examine the evidence of herding behavior on the Chinese stock market. Our main findings are as follows. First, we find strong evidence of herding behavior on both the Shanghai and Shenzhen stock exchanges. Second, we document evidence of asymmetric herding behavior with greater magnitude of herding behavior on up markets than on down markets. Third, our findings suggest that herding behavior is sector-specific and predominant in the industrial and properties sectors. Finally, we unravel strong evidence suggesting that herding behavior is time-varying and in some sectors time-varying herding behavior is more prevalent than in other sectors.

The influence of follower cultural orientation on attitudinal responses towards transformational leadership: evidence from the Chinese hospitality industry

In addition to extending the empirical investigation of the relationship between transformational leadership and follower affective commitment to the Chinese hospitality industry, this study makes a theoretical contribution by investigating the influence of individually held cultural values on this relationship. Building on previous research which has examined whether collectivism moderates the transformational leadership/affective commitment relationship, this study investigates the moderating effects of two additional cultural value orientations, namely power distance and uncertainty avoidance. Hierarchical regression analysis was utilized to analyse survey data from 398 employees of four Chinese hotels in Zhejiang Province. In addition to finding a positive relationship between transformational leadership and affective commitment, data analysis revealed that followers low in power distance exhibited higher levels of affective commitment when working under a transformational leader than those high in power distance. In addition, followers high in uncertainty avoidance and collectivism exhibited greater commitment when working under a transformational leader than those low in uncertainty avoidance and collectivism. These findings clearly indicate the importance of within-country cultural differences to the effectiveness of leaders in the workplace. © 2014 © 2013 Taylor & Francis.

Ownership concentration and product innovation in Chinese private SMEs

Product innovation is extremely important to the growth, success, and ultimate survival of firms. Although its unique features in small and medium-sized enterprises (SMEs) have gained growing attention in the literature, there is limited knowledge as to how ownership concentration moderates the relationship between product innovation and its determinants. Based upon insights from agency and institutional theories, we examine the moderating effects of ownership concentration on the relationship between product innovation and its key determinants in Chinese SMEs, utilizing a large dataset of 43,728 Chinese firms over the period 2005-2006. We focus on examining the differences between single-owner SMEs, where there is dominant control of one family member, and multiple-owner SMEs, where principal-agent conflicts and principal-principal conflicts are more likely to occur. Our findings indicate that single-owned firms tend to convert research and development into product innovation more efficiently than firms with multiple owners, who are typically better at utilizing external sources of knowledge and human capital.

Principal agent problems evident in Chinese PPP infrastructure projects

The demand for infrastructure remains high in China. In order to meet this demand under conditions of limited government funding availability, local governments have increasingly sought private participation through ‘public, private partnerships’ (PPPs). While PPPs are recognised as a reliable mode for delivering infrastructure projects, agency problems are also known to interfere with their success. The nature of these agency problems, along with the types of partnership arrangements under which they occur, is the subject of this research. Semi-structured interviews were conducted with PPP consultants working on infrastructure projects in China. Results suggest that opportunistic behaviour is to be found both within the private sector and within the government sector. While the private sector is shown to take advantage of ‘information asymmetries,’ the government sector is shown to allocate project risks and responsibilities disproportionately in their favour. Results also indicate that PPP arrangements between local government and ‘state owned enterprises’ (SOEs) were less prone to agency abuse, while agency problems in PPP arrangements between local government and private firms were relatively greater.