Governance through shame and aspiration: Index creation and corporate behavior

• 成果类型: Article
• 署名作者: Chattopadhyay, Akash; Shaffer, Matthew D.; Wang, Charles C. Y.
• 署名单位: University of Toronto; University of Southern California; Harvard University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2019.07.005
• 发表日期: 2020
• 页码: 704-724
• 关键词: JPX-Nikkei 400 index; corporate governance; Index inclusion; Reputation incentives; Status incentives; Return on equity; Capital efficiency; social norms

摘要

After decades of de-prioritizing shareholders' economic interests and low corporate profitability, Japan introduced the JPX-Nikkei400 in 2014. The index highlighted the country's best-run companies by annually selecting the 400 most profitable of its large and liquid firms. We find that managers competed for inclusion in the index by significantly increasing return on equity (ROE), and they did so at least in part due to their reputational or status concerns. The ROE increase was predominantly driven by improvements in margins, which were in turn partially driven by cutting research and development (R&D) intensity. Our findings suggest that indexes can affect managerial behavior through reputational or status incentives. (C) 2019 Elsevier B.V. All rights reserved.