Foreign ownership and corporate excess perks

• 成果类型: Article
• 署名作者: Chen, Lifang; Han, Minghui; Li, Yong; Megginson, William L.; Zhang, Hao
• 署名单位: Xiamen National Accounting Institute; South China University of Technology; University of International Business & Economics; University of Oklahoma System; University of Oklahoma - Norman; Guangdong University of Foreign Studies
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-021-00466-7
• 发表日期: 2022
• 页码: 72-93
• 关键词: corporate perquisite consumption; foreign ownership; international corporate finance

摘要

Using manually collected data on foreign owners from 39 international jurisdictions for the 2010-2018 period, we find that foreign ownership significantly reduces corporate excess perquisite consumption in Chinese-listed companies. We take the instrumental variable approach and confirm this causal relationship. Investors from jurisdictions with strong corporate governance and those committed to the principles of responsible investment have greater monitoring effects. Greater cultural distance undermines these effects. The disciplinary role of foreign ownership is stronger in firms with weak governance and low information transparency. Foreign investors reduce corporate excess perks and thereby improve the operational performance. We focus on foreign investors to investigate the role of international owners in China, a host country with relatively weak corporate governance; future research can consider host countries with strong corporate governance. Consequently, we bring space and process to the forefront of the research agenda on perks in the international business literature.