Theses and Dissertations - UTB/UTPA
Date of Award
Doctor of Philosophy (PhD)
Dr. Dave Jackson
Dr. Thanh N. Ngo
Dr. Salvador Contreras
This dissertation examines the relationship between executive compensation, firm performance and liquidity under imperfect corporate governance institution by using a novel Chinese dataset over 2001-2010. The first essay examines the determinants of Chinese executive compensation from the agency-based theoretical framework. I find that there is a positive relationship between Chinese executive compensation and firm performance. The weak corporate governance in China exhibits strong liquidity and control effects after the split-share structure reform. It seems that CEO duality, the establishment of compensation committee, and the involvement of state ownership in Chinese public firms may lead executive compensation to a relation-based rather than a market-based contract. The second essay explores the probability of expropriation of minority shareholders by controlling shareholders in terms of CEO compensation in an imperfect governance institution. The results reveal that firms with more tunneling activities typically have larger controlling ownership, stronger involvement of state control, less balance of power among other large shareholders as well as weak board characteristics. The positive relationship between controlling shareholders’ tunneling and executive compensation implies that the controlling shareholder might divert personal benefits from the public firms at the expense of minority shareholders in terms of executive compensation. The third essay examines the determinants of cross-listing for Chinese public firms by focusing on the A-shares that concurrently issue B-shares or H-shares based on agency theory, and the signaling and bonding hypothesis. I find that cross-listing issuers are motivated to list overseas by the legal and accounting standards of the foreign markets, management remuneration, as well as the demands for external capital. The results suggest that the level of Chinese executive compensation is associated with the decision of cross-listings, implying that cross-listings could be employed by executives as a way of asset appropriation. Moreover, a Chinese firm is more likely to cross-list if it experiences value deteriorations, or a lack of growth opportunity in the domestic market.
University of Texas-Pan American
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