Empirical studies of corporate governance in China

The thesis aims to provide empirical studies towards Chinese corporate governance. Since China initially established its stock exchange system in the 1990s, it has gone through different stages of changes to become a more market-oriented system. Extensive studies have been conducted in Chinese corporate governance, however, many were theoretical discussion focusing on the early stages and there‘s a general lack of empirical analysis. This paper provides three empirical analysis of the Chinese corporate governance: the overall market discipline efficiency, the impact of capital structure on agency costs, the status of 2005- 2006 reform that substantially modified ownership structure of Chinese listed firms and separated ownership and control of listed firms. The three empirical studies were selected to reflect four key issues that need answering: the first empirical study, using event study to detect market discipline on a collective level. This study filled a gap in the Chinese stock market literature for being the first one ever using cross-market data to test market discipline. The second empirical study endeavoured to contribute to the existing corporate governance literature regarding capital structure and agency costs. Two conclusions can be made through this study: 1) for Chinese listed firms, higher gearing means higher asset turnover ratios and ROE, i.e. more debts seem to reduce agency costs; 2) concentration level of shares appears to be irrelevant with company performance, controlling shareholders didn‘t seem to commit to the improvement of corporate assets utilization or contribute to reducing agency costs. This study addressed a key issue in Chinese corporate governance since the state has significant shareholding in most big listed companies. The discussion of corporate governance in the Chinese context would be completely meaningless without discussing the state‘s role in corporate governance, given that about 2/3 of the almost all shares were non-circulating shares controlled by the state before the 2005-2006 overhaul ownership reform. The third study focused on the 2005-2006 reform of ownership of Chinese listed firms. By collecting large-scale data covering all 64 groups of Chinese listed companies went through the reform by the end of 2006 (accounting for about 97.86% and 96.76% of the total market value of Shanghai (SSE) and Shenzhen Stock Exchange (SZSE) respectively), a comprehensive study about the ownership reform was conducted. This would be first and most comprehensive empirical study in this area. The study of separated ownership and control of listed firm is the first study conducted using the ultimate ownership concept in Chinese context.

Related party transactions, corporate governance and accounting quality in Greece

Related Party Transactions (RPTs) have been considered recently in research as a phenomenon which is associated with several financial scandals, shareholder’s wealth expropriation and is used for earnings management (EM) purposes by the reporting entity. This study aimed to: (i) assess the extent of EM and RPTs i Greece; (ii) investigate the association between RPTs and EM; (iii) investigate the association between corporate governance and EM; (iv) investigate the association between corporate governance and RPTs; and (v) investigate the impact of RPTs on Accounting Quality. Greece was selected for this study as it provides a special context due to poor investor protection, high levels of EM and unhealthy financial reporting environment where wealth extraction and EM are more likely. This study examines the relationship between earnings management and RPTs for the firms listed on the Athens Stock Exchange (ASE). Moreover, it examines the association between earnings management and corporate governance activities. The results show a negative and significant relationship between EM and RPTs. This finding does not support the conclusion that RPTs are necessarily conducted to mask fraud or the extraction of firm resources. The results show that firms audited by one of the Big 4 audit firms are associated with less EM. Additionally, the study investigates the relationship between RPTs and accounting quality. The findings show that that there is no significant difference in accounting quality between RPTs firms and non-RPTs firms. This study contributes to the EM, accounting quality and corporate governance literatures. This research suggests recommendations for researchers, data providers and policy makers on ways to reduce the problems associated with RPTs.

From bilateral to trilateral governance in local government contracting in France

In France, the tradition of contracting out local public services has been predominantly one of partnership and co-operation rather than competition and antagonism. However, in recent years the traditional approach has come under intense criticism, something which has far-reaching implications for public-private governance. Adopting the socio-legal approach to the study of contract governance set out by Peter Vincent-Jones, this paper explores the discrepancy between descriptions of a traditional French approach to local public services governance, in which the bilateral values of trust and co-operation are emphasized, and a new discourse of local public services governance, which argues for detailed contract planning and close contract monitoring. It is argued that this discrepancy reveals the beginning of a shift in the governance of public service exchange relationships from relatively noncontractual and bilateral to relatively contractual and trilateral. The French case highlights the importance of regulatory and accountability frameworks to the manner in which contracting parties perceive exchange governance. © Blackwell Publishing Ltd. 2005.

The EU's support for democratic governance in the Eastern neighbourhood:the role of transition experience from the New Member States

The European Union seems to place an increasing rhetorical emphasis on harnessing the transition experience of the new member states. This article examines whether the EU actually makes use of this experience in its promotion of democratic governance in the eastern neighbourhood. The main conclusion is that while reform priorities of the EU in the region are aligned with transition experience, the actual participation of actors from the new members in implementing EU-financed projects aimed at promoting democratic governance is limited. This contradiction should be resolved or it will further erode the credibility of the EU's external policies.

Corporate governance and related party transactions research:an assessment of theories and methodologies

This paper critically evaluates the paradigm, theory, and methodology that dominate research on related party transactions (RPTs). RPTs have been debated in the literature whether they are a facet of conflict of interest between major and minor shareholders or they are normal efficient transactions that help the firms to achieve asset utilization. Literature has been widely interested in studying the association between corporate governance and RPTs especially that according to the agency theory it is assumed that corporate governance as a monitoring tool should impede the negative consequences of RPTs and ensure they are conducted to achieve better asset utilization.

Back to the local? Recalibrating the regional tier of governance in England

By contrast to the far-reaching devolution settlements elsewhere in the UK, political agreement on the governance of England outside London remains unsettled. There is cross- party consensus on the need to 'decentre down' authority to regions and localities, but limited agreement on how this should be achieved. This paper explores the welter of initiatives adopted by the recent Labour government that were ostensibly designed to make the meso-level of governance more coherent, accountable and responsive to meeting territorial priorities. Second, it explores the current Conservative-Liberal Democrat Coalition's programme of reform that involves the elimination of Labour's regional institutional architecture and is intended to restore powers to local government and communities and promote local authority co-operation around sub-regions. Labour's reforms were ineffective in achieving any substantial transfer of authority away from Whitehall and, given the Coalition's plans to cut public expenditure, the likelihood of any significant recalibration in central-local relations also appears improbable. © 2012 Copyright Taylor and Francis Group, LLC.

The governance of online expression in a networked world:free-speech, surveillance and censorship

In recent years, we have witnessed the mushrooming of pro- democracy and protest movements not only in the Arab world, but also within Europe and the Americas. Such movements have ranged from popular upheavals, like in Tunisia and Egypt, to the organization of large- scale demonstrations against unpopular policies, as in Spain, Greece and Poland. What connects these different events are not only their democratic aspirations, but also their innovative forms of communication and organization through online means, which are sometimes considered to be outside of the State’s control. At the same time, however, it has become more and more apparent that countries are attempting to increase their understanding of, and control over, their citizens’ actions in the digital sphere. This involves striving to develop surveillance instruments, control mechanisms and processes engineered to dominate the digital public sphere, which necessitates the assistance and support of private actors such as Internet intermediaries. Examples include the growing use of Internet surveillance technology with which online data traffic is analysed, and the extensive monitoring of social networks. Despite increased media attention, academic debate on the ambivalence of these technologies, mechanisms and techniques remains relatively limited, as is discussion of the involvement of corporate actors. The purpose of this edited volume is to reflect on how Internet-related technologies, mechanisms and techniques may be used as a means to enable expression, but also to restrict speech, manipulate public debate and govern global populaces.

Governance in foreign policy-making in Germany and Poland and Polish-German relations:the role of non-state actors

This thesis examines the influence of non-state actors on Polish-German relations by considering foreign policy-making towards Poland in Germany and vice versa. The approach chosen for this thesis is interdisciplinary and takes into consideration literature from domestic politics (Area Studies), Foreign Policy Analysis and International Relations (IR). The thesis argues that IR, by purely looking into the quality of inter-state relations, too often treats these relations as a result of policies emanating from the relevant governments, without considering the policies’ background. Therefore, the thesis argues that it is necessary to engage with the domestic factors which might explain where foreign policies come from. It points out that non-state actors influence governments’ choices by supplying resources, and by cooperating or competing with the government on an issue at stake. In order to determine the degree of influence that non-state actors can have on foreign policymaking two variables are examined: the institutionalisation of the state relations in question; and the domestic structures of the relevant states. Specifically, the thesis examines the institutionalisation of Polish-German relations, and examines Germany’s and Poland’s domestic structures and their effect on the two states’ foreign policy-making in general. Thereafter, the thesis uses case studies in order to unravel the influence of non-state actors on specific foreign policies. Three case studies are examined in detail: (i) Poland’s EU accession negotiations with regard to the free movement of capital chapter of the acquis communautaire; (ii) Germany’s EU 2004 Eastern Enlargement negotiations with regard to the free movement of workers chapter of the acquis communautaire; and (iii) Germany’s decision to establsh a permanent exhibition in Berlin that will depict the expulsions of millions of Germans from the East following WWII.

Strategic innovation through outsourcing:the role of relational and contractual governance

There is growing evidence that client firms expect outsourcing suppliers to transform their business. Indeed, most outsourcing suppliers have delivered IT operational and business process innovation to client firms; however, achieving strategic innovation through outsourcing has been perceived to be far more challenging. Building on the growing interest in the IS outsourcing literature, this paper seeks to advance our understanding of the role that relational and contractual governance plays in achieving strategic innovation through outsourcing. We hypothesized and tested empirically the relationship between the quality of client-supplier relationships and the likelihood of achieving strategic innovation, and the interaction effect of different contract types, such as fixed-price, time and materials, partnership and their combinations. Results from a pan-European survey of 248 large firms suggest that high-quality relationships between clients and suppliers may indeed help achieve strategic innovation through outsourcing. However, within the spectrum of various outsourcing contracts, only the partnership contract, when included in the client contract portfolio alongside either fixed-price, time and materials or their combination, presents a significant positive effect on relational governance and is likely to strengthen the positive effect of the quality of client-supplier relationships on strategic innovation.

A question of complexity:measuring the maturity of online enquiry communities

Online enquiry communities such as Question Answering (Q&A) websites allow people to seek answers to all kind of questions. With the growing popularity of such platforms, it is important for community managers to constantly monitor the performance of their communities. Although different metrics have been proposed for tracking the evolution of such communities, maturity, the process in which communities become more topic proficient over time, has been largely ignored despite its potential to help in identifying robust communities. In this paper, we interpret community maturity as the proportion of complex questions in a community at a given time. We use the Server Fault (SF) community, a Question Answering (Q&A) community of system administrators, as our case study and perform analysis on question complexity, the level of expertise required to answer a question. We show that question complexity depends on both the length of involvement and the level of contributions of the users who post questions within their community. We extract features relating to askers, answerers, questions and answers, and analyse which features are strongly correlated with question complexity. Although our findings highlight the difficulty of automatically identifying question complexity, we found that complexity is more influenced by both the topical focus and the length of community involvement of askers. Following the identification of question complexity, we define a measure of maturity and analyse the evolution of different topical communities. Our results show that different topical communities show different maturity patterns. Some communities show a high maturity at the beginning while others exhibit slow maturity rate. Copyright 2013 ACM.

The governance of justice and internal security in Scotland:between the Scottish independence referendum and British decisions on the EU

This article examines how the governance of justice and internal security in Scotland could be affected by the outcome of the Scottish independence referendum in September 2014. The article argues that it is currently impossible to equate a specific result in the referendum with a given outcome for the governance of justice and internal security in Scotland. This is because of the complexities of the current arrangements in that policy area and the existence of several changes that presently affect them and are outside the control of the government and of the people of Scotland. This article also identifies an important paradox. In the policy domain of justice and internal security, a ‘no’ vote could, in a specific set of circumstances, actually lead to more changes than a victory of the ‘yes’ camp.

Europol and the EU’s fight against organized crime: exploring the potential of experimentalist governance

While issues relating to the development, legitimacy and accountability of the European Police Office, Europol, have been intensively discussed in political and academic circles, the actual impact of Europol on policy-making in the European Union has yet to receive scholarly attention. By investigating the evolution and the role of Europol's organized crime reports, this article elaborates on whether Europol has been able to exert an influence beyond its narrowly defined mandate. Theoretically informed by the assumptions of experimentalist governance, the article argues that the different legal systems and policing traditions of EU member states have made it difficult for the EU to agree on a common understanding on how to fight against organized crime. This lack of consensus, which has translated into a set of vague and broadly formulated framework goals and guidelines, has enabled Europol to position its Organized Crime Threat Assessments as the point of reference in the respective EU policy-making area. Europol's interest in improving its institutional standing thereby converged with the interest of different member states to use Europol as a socialization platform to broadcast their ideas and to ‘Europeanize’ their national counter-organized crime policy.

A vállalati informatika szerepe a versenyképesség alakításában a pénzügyi és gazdasági válság időszakában (Corporate IT in shaping the competitiveness of the Hungarian enterprises in the financial and economic crisis)

A cikk az informatika és a versenyképesség kapcsolatát vizsgálja. A Budapesti Corvinus Egyetem Versenyképesség Kutatási Programjának korábbi felmérései óta számos új technológia bukkant fel, illetve hazánkat is elérte a világméretű pénzügyi és gazdasági válság hatása. E kihívások tükrében érdemesnek tűnt újra megvizsgálni az információtechnológia (IT) szerepét a versenyképesség alakításában. / === / In this paper the relationship between information technology (IT) and competitiveness is tackled. Since the authors’ previous surveys within their Competitiveness Research Program several new technologies have emerged, and the influence of the word wide financial and economic crisis has reached Hungary as well. In the face of these challenges it is worth reexamining the role of IT in shaping the competitive position of companies. The structure of the paper is as follows. A brief theoretical introduction is provided before their research questionsare presented. After that, the paper contains an analysis on selected fields of the corporate IT function, namely IT infrastructure, IT applications, IT management and IT strategy. Based on this, conclusions are made both at the end of the main parts, and in the final section of the paper. As far as the final conclusions are concerned, the majority of respondents do not regard IT today as a source of sustainable or contestable competitive advantage, though the dominant opinion underlines that IT is a strategic necessity. Besides this, their research results suggest a kind of association between corporate performance and the maturity level of the IT function. However, even the best performing companies are not prepared yet to effectively respond to their own prediction that forecasts the strengthening role of IT as a competitive factor.

Governance in the European Union - Applying the "trilemma of global politics"

The European Union with its sophisticated institutional system is the most important regional integration on Earth. This tight form of economic integration converges to the level that Dani Rodrik calls hyperglobalization in his model, the political trilemma of globalisation. In our paper we develop the mentioned model and then we apply it to the case of the European Integration. We argue that if we want to maintain the deep integration among member states in the EU we have to pass more and more functions of the nation states to the federation level. In case of the EMU that means that federal fiscal policy is needed which could lead to multi-speed Europe considering new member states’ reluctance to give up their specific institutions.

Rules-based economic governance in the European Union: A reappraisal of national fiscal rules.

The economic and financial crisis of 2007/2009 has posed unexpected challenges on both the global and the regional level. Besides the US, the EU has been the most severely hit by the current economic crisis. The financial and banking crisis on the one hand and the sovereign debt crisis on the other hand have clearly shown that without a bold, constructive and systematic change of the economic governance structure of the Union, not just the sustainability of the monetary zone but also the viability of the whole European integration process can be seriously undermined. The current crisis is, however, only a symptom, which made all those contradictions overt that were already heavily embedded in the system. Right from the very beginning, the deficit and the debt rules of the Maastricht Treaty and the Stability and Growth Pact have proved to be controversial cornerstones in the fiscal governance framework of the European Economic and Monetary Union (EMU). Yet, member states of the EU (both within and outside of the EMU) have shown an immense interest in adopting numerical constraints on the domestic level without hesitation. The main argument for the introduction of national fiscal rules was mostly to strengthen the accountability and credibility of national fiscal policy-making. The paper, however, claims that a relatively large portion of national rules were adopted only after the start of deceleration of the debt-to-GDP ratios. Accordingly, national rules were hardly the sole triggering factors of maintaining fiscal discipline; rather, they served as the key elements of a comprehensive reform package of public budgeting. It can be safely argued, therefore, that countries decide to adopt fiscal rules because they want to explicitly signal their strong commitment to fiscal discipline. In other words, it is not fiscal rules per se what matter in delivering fiscal stability but a strong political commitment.