Use this URL to cite or link to this record in EThOS: https://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.749462
Title: Three essays on board of directors in China
Author: Zhang, Mao
ISNI:       0000 0004 7233 7948
Awarding Body: University of Sheffield
Current Institution: University of Sheffield
Date of Award: 2017
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Abstract:
This thesis provides a new insight into the role of board of directors in China. It consists of three main studies. The first examines the effects of board diversity on bank performance captured by profitability and risk. Using a sample of 97 Chinese banks over a period from 2009 to 2013, the results show that board age diversity is negatively associated with bank profitability. To further investigate why age-diverse boards influence bank performance, board age diversity is decomposed into diversity of directors' personal values, utilizing the World Values Survey. The findings suggest that the heterogeneity among directors' views on risk, prudence, and wealth is more likely to spark intragroup conflicts in the decision-making process. This prevents the board from functioning effectively and ultimately weakens bank profitability. The second study investigates the impact of tournament incentives on non-CEO executives by using data on Chinese firms from 2005 to 2015. Through the analysis of this data, a large pay gap between CEOs and non-CEO executives is found to increase firm performance. This link is even stronger when non-CEO executives are from the same age cohort. The peer pressure among the similar-aged non-CEO executives enhances the tournament competition. However, the tournament effect weakens when non-CEO executives belong to three or more age cohorts. The age heterogeneity of non-CEO executives leads to reduced incentives for younger non-CEO executives and discourages the tournament competition. The third study explores the impact of board characteristics on excessive managerial risktaking in state firms. Using a sample of Chinese firms from 2003 to 2015, the finding shows that state-owned companies have a lower cost of debt than private peers. The lower borrowing cost as well as the implicit government guarantees in state firms can also induce excessive risk-taking. On average, there is greater evidence of excess leverage and less cash holdings in state-owned companies. Furthermore, the results also show that independent directors in state firms could encourage risk-taking by increasing the excess leverage but lowering the excess cost of debt, while board size is positively related to excess cost of debt, excess leverage and excess cash holdings.
Supervisor: Yin, Shuxing ; Yang, Junhong ; Talavera, Oleksandr Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.749462  DOI: Not available
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