The Effect Of Ownership Structure On Future Stock Price Crash Risk: Korean Evidence

This paper examines the effect of ownership structure on firm-specific stock price crash risk using listed firm (KOSPI) data in Korea. Prior literatures suggest that corporate governance has an impact on the level of disclosure and the quality. Managers may stockpile negative information about the company, but when such accumulated bad news crosses a threshold, the negative information suddenly becomes publicly available and a stock price crash is observed (Hutton, Marcus, & Tehranian 2009). Prior studies have documented the determinants of future stock price crash risk (Jin & Myer 2006; Hutton et al. 2009; Kim, Li, & Zhang 2011; Hamm, Li, & Ng 2013; Xu, Jiang, Chan, & Yi 2013; Jo, Moon, & Choi 2015; Kim & Zhang 2016). However, it is hard to find the papers about corporate ownership and future stock price crash risk at the term of determinants of the risk. Compare to some financially advanced countries where ownership and management are effectively separated, there is no clear distinction between ownership and management in Korea. Using the percentage of managerial ownership and that of foreign ownership as proxies for ownership structure and measures for future stock price crash risk which was used by Callen and Fang (2013, 2015) and Kim and Zhang (2016), we conducted an empirical analysis examining the link between corporate ownership structure and companies’ subsequent stock price crash risk. We collect 4,294 firm-year observations listed on Korean market from 2002 to 2015, and we use the measures of firm-specific stock price crash risk based on Callen and Fang (2013, 2015) to examine the relation between corporate ownership structure and subsequent stock price crash risk. From the empirical tests, the percentage of managerial ownership is negatively associated with future stock price crash risk. It implies that managerial ownership increases to align the interests of shareholders and managers, it could alleviate the agency problem between them (Jensen & Meckling 1976), helping to resolve information asymmetry and prevent bad news from being withheld, ultimately lowering future stock price crash risk. In addition, we find that higher foreign ownership significantly weakens the negative relation between the percentage of managerial ownership and future stock price crash risk. We interpret this results that the negative side of foreign ownership failed to effectively reduce agency costs, weakening the negative correlation between managerial ownership and future stock price crash risk. Our study may shed some light on the understanding of the ownership structure as a determinant of future stock price crash risk to firms and investors who want to handle crash risk in the stock market

The Effect Of Corporate Governance On Unfaithful Disclosure Designation And Unfaithful Disclosure Penalty Points

This paper investigates the relation between Unfaithful Disclosure Corporations (“UDC”) and corporate governance using listed firm (KOSPI and KOSDAQ) data in Korea. Prior literature reports that corporate governance has an impact on the level of disclosure and the quality of disclosure provided by companies. However, it is hard to find the studies about corporate governance and UDC at the term of disclosure quality. Compare to some financially advanced countries, Korea established corporate governance in a relatively short period of time; hence concerns have been raised the corporate governance have not played effective role to monitor management. We question how corporate governance affects companies’ unfaithful disclosure by using several corporate governance proxy variables and UDC data which is unique system in Korea. From the empirical tests, we find a negative association between the proportion of outside directors, an indicator of the board’s independence, and UDC designation, among companies listed on both KOSPI and KOSDAQ. On the other hand, there is a significant positive association between the proportion of outside directors and UDCs’ imposed and accumulated penalty points among KOSDAQ-listed companies. This implies that outside director system effectively play a monitoring role however due to different natures of members included in outside directors, the system often fails to control regarding based reasons for penalty points imposition. In addition, we find the percentage of foreign equity ownership showed statistically significant positive association with UDC designation and a significant positive association with the imposed and accumulated penalty points among KOSPI-listed companies. We interpret this results that foreign investors with a short-term investment propensity may not enough to play a proper monitoring role in Korea and thereby they cannot effectively control the disclosure quality provided by the management. We also find that there is a significant positive association between the percentage of managerial ownership and UDC designation in the KOSDAQ market.   This study will contribute to academics and disclosure-related practitioners by documenting about corporate governance and its impact on unfaithful disclosure corporations

CEO Career Concerns And Voluntary Disclosure

This paper investigates the relation between Chief Executive Officers (CEO) career concerns and voluntary disclosures using listed firm (KOSPI) data in Korea. Prior research suggests that explicit incentives in the form of CEO stock-based compensation or CEO’s equity ownership mitigate the agency problems of reluctance to make voluntary disclosure. In addition, implicit incentives arising from CEO career concerns are as important as explicit incentives for mitigating agency problems.The labor market assesses CEOs ability and CEO reputation in the market is a valuable asset that is associated with many long-term benefits, such as better future compensation, reappointment in the position, and greater managerial autonomy. CEOs are concerned about such an assessment and these concerns are referred to as career concerns. However, the market has incomplete information about CEOs’ ability especially when the CEOs have short tenures as a CEO position. Hence, CEOs with short tenures have more strong incentives to signal their ability to the labor market so that they can build proper reputation.Implicit incentives arising from CEO career concerns are measured by CEO tenure. I assume that short-tenured CEOs are more career-concerned than long-tenured CEOs. I find that CEOs with short tenures tend to more likely disclose management forecasts. I interpret this result that more career-concerned CEOs have strong incentives to signal their ability to the labor market in order to build their reputations which affect their future payoffs such as compensations and reappointment. In addition, management forecasts, means of voluntary disclosure, are used as effective mechanism. I also find that CEOs with short tenures tend to disclose more accurate management forecasts. This result implies that CEOs with more career concerns have more pressure to provide accurate forecasts because of their reliability in the labor market. Based on these empirical results, I infer that CEOs’ implicit incentives affect their voluntary disclosure decision.This study will contribute to academics and disclosure-related practitioners by documenting about CEOs’ career concerns and their voluntary disclosure decisions

Linkage analysis of longitudinal data

BACKGROUND: We propose a statistical model for linkage analysis of the longitudinal data. The proposed model is a mixed model based on the new Haseman and Elston model and allows several random effects. Specifically, the proposed model includes a random effect for correlation among sib pairs having one sibling in common, and one for the correlation among siblings from the same parents. RESULTS: The proposed model was applied to the analysis of the Genetic Analysis Workshop 13 simulated data set for a quantitative trait of the systolic blood pressure. A simple independence model and two kinds of random effects models yielded good power for detecting linkage for these data sets, while the random effects models performed slightly better than the independence model. Both random effects models showed similar performance. CONCLUSIONS: The proposed models seem not only quite useful in detecting linkage with the longitudinal data for the trait but also quite flexible. They can handle a wide class of correlation structures. Models with a more general class of covariance structure are desirable

Accounting Conservatism, Changes In Real Investment, And Analysts Earnings Forecasts

This study examines whether sell-side analysts fully incorporate into their earnings forecasts the joint effects between accounting conservatism and changes in real investment on the quality of current earnings. Our results indicate that sell-side analysts do not fully incorporate such effects when they forecast future earnings so that they overestimate (underestimate) future earnings when current earnings are inflated (depressed) by those effects. Thus, we conclude that sell-side analysts do not recognize fully the joint effects between accounting conservatism and real activity on the earnings quality and that they need to mitigate their bias to enhance market efficiency by providing investors with a good benchmark for their earnings expectation

Differential expression profiles of anthocyanidin biosynthesis gene during black rice seed development

The black rice (Oryza sativa cv. Heugjinju) is rich in anthocyanins which is beneficial to human health. To correlate the biosynthesis of the pigments with relevant genes, the mRNA level of genes involved in anthocyanin biosynthesis was monitored by quantitative real-time polymerase chain reaction (qRT-PCR) during seed development of black rice. The mRNA level of F3’H, DFR, and ANS, key enzymes in anthocyanidin biosynthesis, peaked at 10 days after flowering. In general, the absolute level of ANS was approximately one order higher than F3’H, F3’5’H, and DFR in 10 days after flowering. The transcript level of major seed protein gene GluA-3, taken as reference, was also at the highest on the 10 days after flowering. However, the level of CHS isogenes was highest at 15 or 20 days after flowering. The highest transcript level of the genes, except CHS, preceded the highest anthocyanidin content by 5 days. This pattern coincided with an increase of anthocyanin content between 10 and 15 days after flowering. From these findings, it is suggested that particular CHS isoforms might be responsible for the anthocyanin production in black rice

Suppression of magnetic ordering in XXZ-type antiferromagnetic monolayer NiPS3

How a certain ground state of complex physical systems emerges, especially in two-dimensional materials, is a fundamental question in condensed-matter physics. A particularly interesting case is systems belonging to the class of XY Hamiltonian where the magnetic order parameter of conventional nature is unstable in two-dimensional materials leading to a Berezinskii-Kosterlitz-Thouless transition. Here, we report how the XXZ-type antiferromagnetic order of a magnetic van der Waals material, NiPS3, behaves upon reducing the thickness and ultimately becomes unstable in the monolayer limit. Our experimental data are consistent with the findings based on renormalization group theory that at low temperatures a two-dimensional XXZ system behaves like a two-dimensional XY one, which cannot have a long-range order at finite temperatures. This work provides experimental examination of the XY magnetism in the atomically thin limit and opens new opportunities of exploiting these fundamental theorems of magnetism using magnetic van der Waals materials.Comment: 57 pages, 24 figures (including Supplementary Information

Digital Workflow for Retrofitting a Surveyed Crown Using a Removable Partial Denture as an Antagonist

Digital workflow expedites the procedure of retrofitting a surveyed crown against an existing removable partial denture (RPD). This article describes a simple and straightforward technique of digital workflow where an existing RPD is scanned as an antagonist to design the rest seat, guide plane, and height of contour of a surveyed crown.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/156192/2/jopr13187_am.pdfhttp://deepblue.lib.umich.edu/bitstream/2027.42/156192/1/jopr13187.pd