Board composition, monitoring and credit risk: evidence from the UK banking industry

This paper examines the effects of board composition and monitoring on the credit risk in the UK banking sector. The study finds CEO duality, pay and board independence to have a positive and significant effect on credit risk of the UK banks. However, board size and women on board have a negative and significant influence on credit risk. Further analysis using sub-samples divided into pre-financial crisis, during the financial crisis and post crisis reinforce the robustness of our findings. Overall, the paper sheds light on the effectiveness of the within-firm monitoring arrangement, particularly, the effects of CEO power and board independence on credit risk decisions thereby contributing to the agency theory

Effects of foreign acquisitions on financial constraints, productivity and investment in R&D of target firms in China

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.This paper examines whether foreign acquisitions lessen financial constraints, improve investment in research & development (R&D) and productivity of the target firms in China based on a sample of 914 cross-border mergers and acquisitions (CBM&A) over the period of 1994-2011. Using investment to cash-flow sensitivity to measure financial constraints, we find that foreign acquisitions in China are associated with a reduction of target firms’ financial constraints, irrespective of the ownership type of the target firm. However, the extent of financial constraint reduction is pronounced for non-SOEs compared to state-owned enterprises (SOEs). This study also provides evidence that foreign acquisitions improve Chinese target firms’ productivity and investment in R&D

Bank excess reserves in emerging economies: a critical review and research agenda

This paper reviews academic studies of excess reserves in the banking system of emerging economies from 2000 to 2014. While excess reserves in emerging countries have attracted increasing attention from scholars, virtually no work has reviewed and synthesised the extant knowledge. This paper takes the necessary step of consolidating and integrating the past literature on emerging country excess reserves. Focusing on articles published in major scholarly journals, we classify the existing literature on excess reserves into three broad taxonomies, namely excess liquidity sources, excess liquidity's effects, and the response policies of central banks of emerging countries. Achievements within each of the three research areas are reviewed, critical gaps identified, and recommendations for future research provided

Impact of ownership structure and ownership concentration on credit risk of Chinese commercial banks

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.Purpose- The purpose of this study is to examine the effects of bank ownership structure and ownership concentration on credit risk. Design/methodology/approach- Using panel data on a sample of 88 Chinese commercial banks with 1194 observations over a period of 2003-2018, this study employs system generalised method of moments regression to examine the impact of bank ownership structure and ownership concentration on credit risk. Two measures of credit risk, namely, non-performing loan ratio and loan loss provision ratio are used to ensure the robustness of the results. Findings– The results show that ownership type (both government and private ownership) exert positive and significant impact on credit risk. However, our results indicate that concentration of ownership in the hands of government has negative and significant effect on credit risk while private ownership concentration positively impacts on credit risk. Overall our findings suggest that concentration of ownership in government hands reduces risk, whilst private ownership concentration exacerbates credit risks. Our results are invariant to alternative measures of credit risk and financial crisis. Practical implications – The findings provide useful insight to guide policy decisions in Chinese banks’ lending policies and bank ownership. Originality/value– Using hand collected data on ownership structure and governance from annual reports this study deepens our understanding on the effectiveness of Chinese banks’ corporate governance reforms on managing credit risks

An analysis of involuntary excess reserves, monetary policy and risk-taking behaviour of Chinese banks

In this paper, we examine the effects of monetary policy on the risk-taking behaviour of Chinese banks in the presence of involuntary excess reserves based on a sample of 95 banks. We find that involuntary excess reserves lead to more aggressive risk-taking suggesting that large involuntary excess reserves stimulate the rapid expansion of credit and the price bubble in the Chinese financial market. However, banks with larger involuntary excess reserves tend to reduce risk-taking more rapidly under the tightening monetary policy regime. The paper sheds light on the effectiveness of government monetary policy in reducing the risk-taking behaviour of banks in an emerging market where involuntary excess reserves are present

Motives of mergers and acquisitions in the European public utilities: an empirical investigation of the wealth-anomaly

© 2018, Emerald Publishing Limited. Purpose: The purpose of this paper is to investigate the motivation and post-merger operating performance (OP) of European utility sectors following mergers and acquisitions (M&A). Design/methodology/approach: Motives behind M&A are examined by looking into the relationships between total gains, target gains and acquirer gains. Post-merger OP is measured by comparing the sample of European utilities with a matched portfolio based on size and market to book ratio with respect to five accounting indicators: growth in turnover, growth in earnings before interest and tax, return on assets, net profit margin and growth in fixed assets. Findings: Synergy is the primary motive for M&A in the European utility firms. This study also found that post-merger OP is negative and significant across all the five accounting indicators matched by size, and market to book ratio suggesting that utility mergers underperform in the long term. The findings suggest that gains accruing to utilities involved in acquisitions are short term in nature. Practical implications: Negative post-merger OP bears important policy implications as in future antitrust/competition authorities should be more vigilant before approving utility mergers. Originality/value: Public utilities possess several characteristics that are different from industrial firms and therefore need to be examined separately. Empirical literature on M&A is very limited on utilities. This study has addressed this gap by examining the motivation and post-merger OP of the European utility firms

ICT-driven interactions: on the dynamics of mediated control

Interactions driven by Information Communications Technologies (ICT) have gained significant acceptance and momentum in contemporary organisational settings, this is illustrated by their massive adoption and varied deployment across the various levels of an organisation’s hierarchy. ICTs such as mobile telephones, Personal Digital Assistants (PDA), videoconferencing, BlackBerries and other forms of portable and immovable computing technologies provide enduring bases for mediated interactions in human activities. This thesis looks into the dynamics of ICT-driven interactions and, distinctively, focuses on the manifestations and implications of mediated control in a collaborative environment. The study draws on the concept of administrative behaviour which leads to the observation that the nature of mediated control is not static, but evolutionarily dynamic that springs from highly unpredictable contexts of work. Thus, interactions driven by ICTs influence and change the dynamics of mediated control against the background of the rhythm, structure and direction of an organisation’s purposeful undertakings. Findings indicate, quite paradoxically, that networks set up through the instrumentality of technology mediated interaction discourage domination and inspire individual discretion in spite of their promise of electronic chains. The analysis reflects the notion that mediated control is not only about the predetermination of targets that are attained at the subordinate level. Indeed, the study advocates a fundamental conceptualisation of mediated control as double-sided concept, integrating the use of discretion that, occasionally, makes subordinates drive and initiate key control techniques that steer organisational life. Therefore, through the application of philosophical hermeneutics for a rigorous data interpretation, this study develops an innovative and holistic understanding of mediated control which not only adds to, but also extends, the current organisational perception of control by the incorporation of discretion and, in the process, makes a distinctive contribution to scholarship