published_or_final_version / Business Administration / Master / Master of Business Administration

University of Macau / Faculty of Law

Lau Yuk Hoi. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2000. / Includes bibliographical references (leaves 109-110). / Abstracts in English and Chinese. / Abstract --- p.i / Acknowledgement --- p.iii / Table of Contents --- p.iv / List of Notations --- p.vi / List of Propositions --- p.vii / List of Figures --- p.viii / List of Appendices --- p.x / Chapter Chapter 1. --- Introduction - The Reaction Approach --- p.1 / Chapter Chapter 2. --- Assumption for OLG Model --- p.7 / Chapter 2.1 --- Assumption A --- p.7 / Chapter Chapter 3. --- Equilibrium Conditions Without Fundamental Risk --- p.9 / Chapter 3.1 --- Price as a Weighted Average --- p.9 / Chapter 3.2 --- Determination of A and B --- p.11 / Chapter 3.2.1 --- Assumption B --- p.12 / Chapter 3.2.2 --- RE Line and NE Line --- p.13 / Chapter 3.2.3 --- Equilibrium values of A and B --- p.14 / Chapter 3.3 --- Rational Expectation on Price Variance (RV Line) --- p.16 / Chapter 3.4 --- Noisy Expectation on Price Variance (NV Line) --- p.18 / Chapter 3.4.1 --- DeLong's Model --- p.19 / Chapter 3.4.2 --- Bhushan's Model --- p.21 / Chapter 3.5 --- Change in Relative Perceived Variance --- p.23 / Chapter 3.5.1 --- General Problem of OLG Model in Noisy Trading --- p.23 / Chapter 3.5.2 --- Changes in Noise Traders' Beliefs --- p.24 / Chapter 3.5.3 --- "Relative Perceived Price Variance of n, θ" --- p.25 / Chapter 3.5.3.1 --- "Effect of Increasing θ on Price Variance, dC/dθ" --- p.26 / Chapter 3.5.3.2 --- "Effect of Increasing θ on Expected Price Level, dp/dθ" --- p.27 / Chapter Chapter 4. --- Equilibrium Conditions With Fundamental Risk --- p.31 / Chapter 4.1 --- Price as a Weighted Average --- p.32 / Chapter 4.2 --- Determination of A and B --- p.34 / Chapter 4.2.1 --- Assumption C --- p.34 / Chapter 4.2.2 --- RE Line and NE Line --- p.35 / Chapter 4.2.3 --- Equilibrium values of A and B --- p.36 / Chapter 4.3 --- Rational Expectation on return Variance (RV Line) --- p.37 / Chapter 4.4 --- Noisy Expectation on Return Variance (NV Line) --- p.40 / Chapter 4.4.1 --- De Long's Model --- p.41 / Chapter 4.4.2 --- Bhushan's Model --- p.42 / Chapter 4.5 --- Change in Relative Perceived Return Variance --- p.45 / Chapter 4.5.1 --- Specification of Noisy Expectation --- p.46 / Chapter 4.5.2 --- Relative Perceived Return Variance of n，Θ --- p.46 / Chapter 4.5.2.1 --- "Effect of Increasing Θ on Price Variance, dC/dΘ" --- p.47 / Chapter 4.5.2.2 --- "Effect of Increasing Θ on Expected Price Level, dp/dΘ" --- p.48 / Chapter 4.6 --- Relative Perceived Price Risk versus Relative Perceived Dividend Risk --- p.52 / Chapter Chapter 5. --- Conclusion and Discussion --- p.55 / Figures --- p.58 / Appendices --- p.86 / References --- p.109

Traditionally, the corporate governance scholarship has emphasized heavily the "dispersed shareholder regimes" in the United States and the United Kingdom, although "controlling shareholder regimes" constitute the vast majority of the world's economy. Since there have been few systematic studies concerning controlling shareholder regimes (in particular, controlling shareholder regimes in developing countries), they have remained in a black box. With this concern in mind, in this dissertation, I proposed various analytical frameworks for understanding the corporate governance of controlling shareholder regimes that, improperly, have been overlooked for a long time. In the first chapter of my dissertation, entitled Reenvisioning the Controlling Shareholder Regime: Why Controlling Shareholders and Minority Shareholders Embrace Each Other, I proposed theories to explain why controlling shareholders and minority shareholders "voluntarily" embrace each other in an emerging capital market while the legal system in that jurisdiction does not require controllers to protect investors. In the second chapter, entitled Controlling Shareholders - "Roving" v. "Stationary," I explored two types of controlling shareholders (i.e., "roving" and "stationary" controllers) and delved into why an economy with stationary controllers is better in terms of corporate governance and more likely to be prosperous than an economy with roving controllers. In the third chapter, entitled Transplanting a Poison Pill to a Controlling Shareholder Regime, I analyzed how a poison pill would affect the market for corporate control and the corporate governance of controlling shareholder regimes. In this dissertation, I have proposed many unconventional analyses and views on controlling shareholder regimes (in some cases, the concepts may be counterintuitive from the perspective of the conventional corporate governance scholarship). I hope that my research will guide scholars in a theoretical way to understand the various aspects of law and economics related to corporate governance that mostly have not been recognized or that have been misunderstood in the standard scholarly studies of corporate governance.

In the presence of business groups, the expropriation through related party transactions (RPTs) is common and costly to minority shareholders. At the same time, it is well recognized that RPTs can help firms overcome market shortcomings. Using the setting of India's RPT voting rule, I find that a mandatory and binding shareholder voting mechanism helps filter out expropriation. Minority shareholders actively raise their voice against RPT resolutions, resulting in substantial shareholder dissent. My difference-in-difference analysis reveals that shareholder voting has a significant deterrence effect on RPT volume, especially on financial RPTs. I also find that stock prices react positively to news signaling the passage of the voting rule, and that the association between firm profitability and RPT increases following rule's adoption, suggesting that rule has a positive effect on shareholder value. Lastly, I show that mandatory RPT voting makes Indian firms more attractive to foreign institutional investors.

She, Yingni. / "August 2011." / Thesis (M.Phil.)--Chinese University of Hong Kong, 2011. / Includes bibliographical references (leaves 43-49). / Abstracts in English and Chinese. / Chapter 1. --- Introduction --- p.1 / Chapter 2. --- Literature Review --- p.6 / Chapter 2.1 --- Investor Sentiment Measures --- p.6 / Chapter 2.2 --- Chinese Stock Market Overview --- p.13 / Chapter 3. --- Chinese Investor Sentiment Measure --- p.16 / Chapter 3.1 --- Data and Variables --- p.16 / Chapter 3.2 --- Methodology --- p.21 / Chapter 3.3 --- Empirical Results --- p.22 / Chapter 3.4 --- Investor Sentiment Behavior --- p.24 / Chapter 4. --- Threshold Autoregressive Model --- p.29 / Chapter 4.1 --- Methodology --- p.29 / Chapter 4.2 --- Estimated Results --- p.31 / Chapter 4.3 --- Forecasting Performance --- p.36 / Chapter 4.4 --- Trading Strategy --- p.38 / Chapter 5. --- Conclusion --- p.41 / References --- p.43

In the second part of the thesis, we investigate whether ownership structure has influence to long-term stock return. We use a risk adjustment method to make it possible to compare stock return in different terms, therefore, we can use GMM method to estimate the influence of ownership structure in a panel sample set. We find that, insider ownership and institutional ownership are all significantly favorable to long-term stock return. However, the quarterly insider ownership change and quarterly institutional ownership change do not show significant influence. We also use a Fama-MacBeth approach to compare the results from GMM estimation and we find that the results are similar. / This thesis consists of two related parts. In the first part, we develop a method to extract insider ownership information from insider transaction reporting files and by combining it with quarterly institutions holding report data, we obtain quarterly ownership structure for most common stocks listed in CRSP tape. We use ownership structure and quarterly ownership change to analyze how insiders, large institutions and individual investors differ from each other in their holding preference to stock characteristics and trading behavior. We find that, these three kinds of investors have significant difference in holding preference to size, price, monthly turnover, previous 12-months return. They also show significant difference in trading behaviors. Basically, institutions are momentum trader, and are interested in "growth" stocks. Insiders are anti-momentum trader, they sell more when past return is higher and they more focus on "value" stocks. / Zhu, Honghui. / "September 2002." / Source: Dissertation Abstracts International, Volume: 64-11, Section: A, page: 4150. / Supervisors: Jia He; Xiaoqiang Cai. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2002. / Includes bibliographical references (p. 94-101). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Electronic reproduction. Ann Arbor, MI : ProQuest dissertations and theses, [200-] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstracts in English and Chinese. / School code: 1307.

This study examines the reactions of market makers and investors to large dividend increases to identify the motives for dividend increases. Uniquely, this study simultaneously tests the signaling and agency abatement motivations as explanations of the impact of dividend increases on stock prices and bid-ask spreads. The agency abatement hypothesis argues that increased dividends constrict management's future behavior, abating the agency problem with shareholders. The signaling hypothesis asserts that dividend increases signal that managers expect higher or more stable cash flows in the future. Mean stock price responses to dividend increase announcements during 1995 are examined over both short ( _1, 0) and long ( _1, 504) windows. Changes in bid-ask spreads are examined over a short ( _1, 0) window and an intermediate (81 day) period. This study partitions dividend increases into a sample motivated by agency abatement and a sample motivated by cash flow signaling. Further, this study examines the agency abatement and cash flow signaling explanations of relative bid-ask spread responses to announcements of dividend increases. Estimated generalized least squares models of market reactions to sampled events support the agency abatement hypothesis over the cash flow signaling hypothesis as a motive for large dividend increases as measured by Tobin's Q and changes in the distribution of cash flows.

This thesis assumes that the real essence of an organisation is its connectedness to the primary task. Hence the metaphor of 'soul' and the notion that passion for the task must be present to create 'soul'. It therefore follows that the nature of the primary task is central to the type of organisations that is created. The past decade of downsizing and the rise of the 'high performance culture' have developed their own narrative about delivering shareholder value. Alongside this, too often, exists the feeling that "this place has lost it soul". From that perspective, this thesis addresses the question: how does an increased focus on shareholder value impact on the organisation's passion for its primary task? In a qualitative study based on semi-structured interview data, the characteristics of the task of shareholder value delivery and its impact on customer service delivery are described in this thesis as have been reported by the informants of three large business units from The Australian Banking Corporation, Plc. (ABC), the fictionalised organization which forms the case study for this research. Drawing on a psycho-analytic theoretical frame of organisational theory, the dynamic that this shift in task has created is identified and interpreted. From this phenomenological position, the findings clearly reveal that shareholder value is identified as the current primary task of the organisation, and has become deeply embedded through a business model promoting separated specialist businesses within the umbrella of ABC. The findings show that the tension between delivering service to the customer as stakeholder, the initial primary task, and the current task of delivering shareholder value is unconsciously contained through a process of splitting and projection to establish an idealised customer. The concept of social defense is applied to interpret this dynamic as it enables ABC to engage in the fantasy that it remains customer focussed. In order to replace the primary task of customer service with the task of delivering shareholder value, a process of substitution and mutation developed unconsciously from fear for the survival of ABC which, equally unconsciously connected the notion of service with the desire to serve the shareholder. The pain and anxiety produced by downsizing and continual attention to cost reduction, highly characteristic of the shareholder value model, substantially reduced organisational morale and, in this context, ABC embraced a genuine desire to create a new set of values and a healthy culture. However, what emerged was a religious fundamentalist culture that protects and reinforces the task of delivering shareholder value. Weber's protestant fundamentalism model promoted the creation of financial wealth through hard work while generating feelings of inclusion to render the task of shareholder value more palatable in the organisation. These two systems became symbiotic though the task values intrinsic in delivering shareholder value were recognised as being devoid of altruism. The dogma driven by the system is fundamentalist, the culture is divisively individualistic and passion for the newly accepted primary task is apparently impossible. Hence, it is concluded, the organisational 'soul' of ABC has been corroded. The implications of these findings for practice are concerned with the impact of the task of pursuing shareholder value, and the system it creates as they impact on ABC's ability to change and adapt so that: - Short-termism and risk aversion appear to be affecting the capacity of the CEO to lead the organisation into a growth phase. - Adoption of the specialisation model at ABC, supported by the CEO with a competitive individual reward program, appears to have reduced the potential for ABC to institute change in response to market evolution. - The preparedness of the CEO to risk investment in the medium to long term for growth while managing the short-term expectations of the market has been diminished. - The heroic CEO that the shareholder value model attracts is now concerned about his own legacy, which is impacting on his preparedness to promote a vision for the medium to longer term. - The culture supports the status quo and is now promoted by ABC as part of what differentiates it from its competitors. To change this, it will need to look outside ABC. This, however, appears to have become a blind spot.

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