Equity incentive schemes, investor protection and corporate performance: evidence from China

Purpose On the basis of corporate governance and agency cost theory, using the fifth sub-indicator of Fan et al. China Marketization Index as the regional investor protection index (IPI), the purpose of this paper is to explore the impact of equity incentives and regional investor protection on corporate payout policies and corporate performance. Design/methodology/approach This paper establishes ordinary least squares regression model to examine interactions between the effects of equity incentives and regional investor protection upon firms’ dividend payouts. In addition, the authors also explore whether the joint effects on payouts are altered in the presence of growth opportunities, and investigate the effects of interactions between equity incentives and regional investor protection on corporate performance. Findings The authors observe that firm managers appear to abuse equity incentives by increasing dividend payouts. However, regional investor protection can potentially restrain such behavior. The restraining effect depends on the firms’ growth opportunities, on the basis of which the effect on cash (stock) dividends is found to be weaker (stronger) in high-growth firms – and stronger (weaker) in low-growth firms. Further evidence indicates that the restraining effect of regional investor protection on selfish dividend-related behavior encouraged by equity incentives may also prove valuable in encouraging exploitation of these incentives so as to enhance corporate performance. Practical implications Since reforming investor protection laws and improving judicial quality are difficult and lengthy at a country level. Improving regional levels of investor protection, however, seems more feasible and effective. Through measures encouraging the development of intermediaries, increases in the number of lawyers – all of which seem likely to constrain behavior harmful to the interests of investors – the provincial administrations can reasonably expect to contribute toward improvements in the performance of firms and the development of the economy in their region. This paper provides encouragement to regional policy makers in China and in other developing countries. Originality/value This paper uses a regional index of investor protection to study the impact on corporate dividends and performance, in contrast with most previous studies, which have examined these issues at country or individual firm levels. The use of a regional-level investor IPI in this paper therefore fills a gap by coming in between the country- and firm-level indicators typically used in previous research, thus providing a new perspective on investor protection issue

The impact of anti-corruption measures and risk effects on equity incentives and financial misreporting in China

This study examines the effects of anti-corruption and equity incentive risk on financial misreporting in the context of China’s unique corporate ownership structure and governance regime. Using a sample comprising 2,708 cases of financial restatement over the 2007–2017 period. Our key findings suggest that managers’ shareholdings are significantly and positively associated with their firms’ financial misreporting, and certain equity risk factors dramatically alter Chinese corporate governance. Furthermore, managers’ motivation to misreport is significantly more pronounced in non–state owned enterprises (non-SOEs), suggesting that equity incentive risk effects mitigate the “absence of ownership” problem believed to affect SOEs. Managers in highly competitive industries and firms with low institutional ownership are found to be highly motivated to misreport performance

Targeted suppression of heme oxygenase-1 by small interference RNAs inhibits the production of bilirubin in neonatal rat with hyperbilirubinemia

<p>Abstract</p> <p>Background</p> <p>Excessive accumulation of bilirubin contributes to neonatal hyperbilirubinemia in rats. Heme oxygenase (HO) is one of the rate-limiting enzymes in catabolizing heme to bilirubin. In the present study, we investigated whether suppression of rat HO-1 (rHO-1) expression by small interference RNAs (siRNAs) reduces bilirubin levels in hyperbilirubinemic rats.</p> <p>Results</p> <p>Four pairs of siRNA targeting rHO-1 mRNA were introduced into BRL cells and compared for their inhibitory effect on the expression of <it>rHO-1 </it>gene and production of rHO-1 protein. The siRNA exhibiting the most potent effect on HO-1 expression and activity was then administered intraperitoneally to 7 to 9-day-old rats with hyperbilirubinemia. The siRNA distributed mostly in the liver and spleen of neonatal rat. Serum bilirubin levels and hepatic HO-1 expression were further evaluated. Systemic treatment of siRNA targeting rHO-1 reduced hepatic HO-1 expression and decreased the serum bilirubin levels in a time- and dose-dependent manner, and siRNA decreased the indirect bilirubin levels more effectively than Sn-protoporphyrin (SnPP), an HO-1 inhibitor.</p> <p>Conclusion</p> <p>siRNA targeting rHO-l attenuates hepatic HO-1 expression and serum bilirubin levels. Thus this study provides a novel therapeutic rationale for the prevention and treatment of neonatal hyperbilirubinemia.</p

Mineralization of organic matter in microbialites and implications for microbialite reservoirs in Member IV of the Leikoupo Formation, Sichuan Basin, China

Microbialites are important reservoirs for oil and gas. The mineralization of organic matter in microbialites during early diagenesis can produce acidic fluids that dissolve carbonate grains, and can also result in an alkaline pore water that precipitates cement. The mineralization of organic matter in microbialites and its effect on microbialite reservoirs have not yet been studied in detail. In this study, quantitative statistical analysis of the two-dimensional spatial occurrence of pores and microbial fabrics, in situ geochemical analysis of specific components (microbial, transitional zone, and fine spar fabrics), and qualitative evaluation of the implications for microbialite reservoirs were undertaken on microbialites from Member IV of the Leikoupo Formation, Sichuan Basin, China. The quantitative statistical analysis shows that pores are spatially associated with microbial fabrics, but porosity has a poor correlation with microbial fabric content. In situ geochemical data indicate that microbialites with different porosities experienced different processes of organic matter mineralization. The processes of organic matter mineralization such as oxidation and nitrate reduction can provide more dissolution micropores than the process related with sulfate reduction, whereas the process of organic matter mineralization related with Fe–Mn oxide reduction results in cementation. Micropores created by organic matter mineralization can act as fluid channels for later dissolution and are important in the development of microbialite reservoirs

A multi-filter enhanced genetic ensemble system for gene selection and sample classification of microarray data

Background: Feature selection techniques are critical to the analysis of high dimensional datasets. This is especially true in gene selection from microarray data which are commonly with extremely high feature-to-sample ratio. In addition to the essential objectives such as to reduce data noise, to reduce data redundancy, to improve sample classification accuracy, and to improve model generalization property, feature selection also helps biologists to focus on the selected genes to further validate their biological hypotheses.Results: In this paper we describe an improved hybrid system for gene selection. It is based on a recently proposed genetic ensemble (GE) system. To enhance the generalization property of the selected genes or gene subsets and to overcome the overfitting problem of the GE system, we devised a mapping strategy to fuse the goodness information of each gene provided by multiple filtering algorithms. This information is then used for initialization and mutation operation of the genetic ensemble system.Conclusion: We used four benchmark microarray datasets (including both binary-class and multi-class classification problems) for concept proving and model evaluation. The experimental results indicate that the proposed multi-filter enhanced genetic ensemble (MF-GE) system is able to improve sample classification accuracy, generate more compact gene subset, and converge to the selection results more quickly. The MF-GE system is very flexible as various combinations of multiple filters and classifiers can be incorporated based on the data characteristics and the user preferences. <br /

Essays on equity incentive and share pledging in China

The three essays collected in this PhD thesis: the first two on equity incentives and the third one on share pledging in China. The first essay shows regional investor protection has a significant restraining effect on managers self-interested behavior, and this restraining effect can have a positive effect on corporate growth and performance. The second essay finds that the anti-corruption campaign in China has increased managers’ risk-aversion, and the risk aversion-related mechanisms to mitigate managers’ motivation to manipulate firms’ performance in SOEs, less competitive industries and high institutional ownership firms. The third essay demonstrates tighter regulatory requirements can effectively reduce firms’ crash risk, relax financial constraints, reduce bankruptcy risk, and mitigate controlling shareholder expropriation of minority shareholders wealth via tunnelling. These effects significantly alleviate the destructive effect of controlling shareholders’ activities on firm and increase firm value

Impact of share pledging by controlling shareholders on firm value in the context of China’s tightened regulatory reforms

This study investigates the effect of the 2018 regulatory reforms of share pledging by a controlling shareholder on firm value in China. Using a dataset spanning the period 2015 to 2020, we provide robust results suggesting that tighter regulations effectively reduce firms' crash risk, relax financial constraints, reduce bankruptcy risk, and mitigate the controlling shareholder expropriation of minority shareholders' wealth via tunnelling. Additionally, controlling shareholders, by investing more pledged funds in the listed firm after reforms, foster capital investment and R&D expenditure, which benefit firm growth and competitiveness and ultimately increase firm long-term value

NMR-Based Metabolomics to Analyze the Effects of a Series of Monoamine Oxidases-B Inhibitors on U251 Cells

Alzheimer’s disease (AD) is a typical progressive neurodegenerative disorder, and with multiple possible pathogenesis. Among them, coumarin derivatives could be used as potential drugs as monoamine oxidase-B (MAO-B) inhibitors. Our lab has designed and synthesized coumarin derivatives based on MAO-B. In this study, we used nuclear magnetic resonance (NMR)-based metabolomics to accelerate the pharmacodynamic evaluation of candidate drugs for coumarin derivative research and development. We detailed alterations in the metabolic profiles of nerve cells with various coumarin derivatives. In total, we identified 58 metabolites and calculated their relative concentrations in U251 cells. In the meantime, the outcomes of multivariate statistical analysis showed that when twelve coumarin compounds were treated with U251cells, the metabolic phenotypes were distinct. In the treatment of different coumarin derivatives, there several metabolic pathways changed, including aminoacyl-tRNA biosynthesis, D-glutamine and D-glutamate metabolism, glycine, serine and threonine metabolism, taurine and hypotaurine metabolism, arginine biosynthesis, alanine, aspartate and glutamate metabolism, phenylalanine, tyrosine and tryptophan biosynthesis, glutathione metabolism and valine, leucine and isoleucine biosynthesis. Our work documented how our coumarin derivatives affected the metabolic phenotype of nerve cells in vitro. We believe that these NMR-based metabolomics might accelerate the process of drug research in vitro and in vivo