Non-tradable share reform, liquidity, and stock returns in China

This article studies the influence of the non-tradable share reform in the cross-section of stock returns in China. Prior research has generally neglected this important development in the Chinese stock market. We find that the firm-specific illiquidity measures that reflect direct transaction costs, price impact and difficulties in trading immediacy, exhibit a positive and significant relationship with stock returns. These effects are particularly pronounced after the non-tradable share reform. Furthermore, in the post-reform era, portfolios with high illiquidity (i.e. high relative bid-ask spread, high Amihud illiquidity, low Amivest liquidity ratio) significantly outperform portfolios with low illiquidity, controlling for size, and book-to-market effects.

Co-production and health system reform - from re-imagining to re-making

There is growing interest in the application of citizen participation within all areas of public sector service development, where it is increasingly promoted as a significant strand of post-neoliberal policy concerned with re-imagining citizenship and more participatory forms of citizen/consumer engagement. The application of such a perspective within health services, via co-production, has both beneficial, but also problematic implications for the organisation of such services, for professional practice and education. Given the disappointing results in increasing consumer involvement in health services via ‘choice’ and ‘voice’ participation strategies, the question of how the more challenging approach of co-production will fare needs to be addressed. The article discusses the possibilities and challenges of system-wide co-production for health. It identifies the discourse and practice contours of co-production, differentiating co-production from other health consumer-led approaches. Finally, it identifies issues critically related to the successful implementation of co-production where additional theorisation and research are required.

When sexual infidelity triggers murder: Examining the impact of homicide law reform on judicial attitudes in sentencing

In October 2010, the UK Parliament brought into effect law that replaced the partial defence to murder of provocation with a new partial defence of ‘loss of control,’ applicable to England, Wales and Northern Ireland. Although it retained some key features of its controversial predecessor, the new partial defence was in part designed better to address the gendered contexts within which a large number of homicides are committed. In examining the impact of the reforms, we will focus on long-held concerns about the treatment of sexual infidelity as a trigger for loss of control in murder cases. The article undertakes an analysis of English case law to evaluate the way in which sexual infidelity-related evidence has influenced perceptions of a homicide defendant’s culpability, for the purposes of sentencing, both before and after the implementation of reform. The analysis reveals that, in sentencing offenders post reform, the higher courts have failed to follow the spirit of the reforms respecting the substantive law by effecting a corresponding change in sentencing practice.

Perceptions of public security in post-reform urban China: a routine activity analysis

This paper investigates the personal and environmental determinants of public security perceptions across 32 Chinese cities within the risk/opportunity framework of Cohen and Felson's (American Sociological Review 44:588-608, 1979) routine activity theory. Structural path analysis reveals that public security perceptions in China are informed by similar personal and environment characteristics to those reported as important in extant research within Western contexts. However, the frequently reported influence of gender on public security perceptions in the West does not appear to extend to post-reform urban China. The results provide support for the routine activity theory in terms of extending our understanding of the factors that influence perceptions of public security to a non-Western context. © 2009 Springer Science+Business Media B.V.

Integrated practice in the early years in Australia: The assumptions, omissions and contradictions of policy reform

The aim of this article is to examine current national early years’ policy reform, which emphasises the importance of service integration, national quality standards and a quality knowledge base for educators concerning the provision of early childhood education and care. Using Queensland, Australia, as an example, a policy discourse analysis identifies two problematics of implementing current national policy – the early childhood education and care problematic and the integration problematic. The article argues that speedy implementation of a national policy in order to meet national targets has unintended consequences for the knowledge base of educators and the possibility of collaboration within service provision. Although government commitment in this area is evident, these consequences and the current difficulties surrounding integration are the result of the lack of a specific integration strategy, and government investment focussed on the development of an integrated workforce.

Controlling shareholder, expropriations and firm’s leverage decision: Evidence from Chinese Non-tradable share reform

This paper examines the effect of excess control rights on the leverage decisions made by Chinese non-SOEs before and after the Non-tradable share reform (NTS reform). We find that firms with excess control rights have more excess leverage and their controlling shareholders use the resources for tunneling rather than investing in positive NPV projects. We also find that excess leverage in firms with excess control rights decreases and the market reaction to announcements of related party transactions are more positive after NTS reform. This confirms that tunneling by the controlling shareholders actually reduced. We argue that in emerging markets where legal protection for creditors and shareholders is weak, controlling shareholders borrow excess debt to tunnel through inter-corporate loans and related party transactions. Furthermore the privatization of these economies can reduce the controlling shareholders' tunneling activities and associated excess leverage which destroys firm value.

Making sense of business leadership vis-à-vis china’s reform and transition

Purpose – The purpose of this paper is to explore the contemporary paradigm of business leadership vis-à-vis China’s reform and transitional context. Design/methodology/approach – The paper employs an evidence-based approach to explore the business leadership issues influenced by economic reform and within the context of societal transition in China. A qualitative research method was adopted based on in-depth interviews with a number of middle managers from a variety of Chinese enterprises, including state-owned, domestic-private and foreigninvested enterprises. Content analysis of several rounds of interviews added depth to the data analysis. Findings – The findings complement existing thoughts and illustrate concepts, issues, and characteristics not yet emphasized in mainstream literature. General patterns and associated characteristics of business leadership in China, as well as specific patterns associated with different forms of enterprise ownerships, are identified. Research limitations/implications – The study makes a timely and necessary contribution that enriches context-specific understandings of business leadership against the backdrop of surrounding economic, social, and cultural changes. Practical implications – The study enriches understandings of commonalities and differences in leadership across the globe, facilitating working collaboratively to achieve common goals in a global community. Originality/value – The study offers new insights into business leadership by linking contextual, personal, and cognitional factors together and demonstrates some unique characteristics of leadership styles in transitional economies like China.

Legal liability, government intervention, and auditor behavior : evidence from structural reform of audit firms in China

This paper investigates how legal liability influences audit quality and audit fees, particularly in the presence of government intervention. Since 2010, all Chinese audit firms were required to transform from a structure of limited liability company (LLC) to limited liability partnership (LLP), which removes the cap on the liability exposure of negligent auditors. By adopting this natural experiment, we document the following findings: first, after audit firms reorganize as LLPs, auditors are more likely to (1) issue modified audit opinions and going-concern opinions, (2) constrain clients’ earnings management, and (3) charge a premium in audit fees, which suggest that exerting unlimited legal liability on negligent auditors improves both audit quality and audit fees. Second, the effect of the LLP adoption is more pronounced when auditors are from local audit firms, and clients are controlled by local governments. Further analyses suggest that the stock prices of clients positively react to the reform event, which indicates that LLP adoption improves the overall value of audits. In summary, our empirical findings are consistent with the argument that legal liability is able to effectively shape auditor behavior in emerging markets where the other institutional mechanisms are relatively weaker and government intervention is heavy.

Stakeholders’ perspectives on the role of regulatory reform in integrated reporting

This paper reports on an exploratory study of the preferences of users of non-financial reporting for regulatory or voluntary approaches to integrated reporting (IR). While it is well known that companies prefer voluntary approaches to non-financial reporting, considerably less is known about the preferences of the users of non-financial information. IR is the latest development in attempts over 30 or more years to broaden organisational non-financial reporting and accountability to include the wider social and environmental impacts of business. It promises to provide a more cohesive and efficient approach to corporate reporting by bringing together financial information, operational data and sustainability information to focus only on material issues that impact an organisation’s ability to create value in the short, medium and long term. The study found more support for voluntary approaches to IR as the majority of participants thought that it was too early for regulatory reform. They suggested that IR will become the reporting norm over time if left to market forces as more and more companies adopt the IR practice. Over time IR will be perceived as a legitimate practice, where the actions of integrated reporters are seen as desirable, proper, or appropriate. While there is little appetite for regulatory reform, half of the investors support mandatory IR because, in their experience, voluntary sustainability reporting has not led to more substantive disclosures or increased the quality of reporting. There is also evidence that IR privileges financial value creation over stewardship, inhibiting IR from moving beyond a weak sustainability paradigm.