We investigate how CEO's risk incentive (vega) affects firm innovation. To establish causality, we exploit compensation changes instigated by the FAS 123R accounting regulation in 2005 that mandated stock option expensing at fair values. Our identification tests indicate a positive and causal...

Purpose - This paper aims to establish a theoretical framework that can comprehensively explain the executive compensation in state-owned enterprises (SOEs) within the context of socialism with Chinese characteristics. Design/methodology/approach - The author develops a theoretical framework for...

We find strong evidence that when the customer base is more concentrated, the supplier firm's CEO receives more risk-taking incentives in compensation. This finding is robust to numerous alternative specifications and to different approaches that mitigate endogeneity concerns. Further, we show...

Debt covenant violation alters firm dynamics, providing creditors with the right to demand repayment, and via that right, influence firm actions. We provide evidence consistent with creditors employing that channel to influence CEO compensation. Using regression discontinuity analysis, we show...

This paper investigates the value of academic independent directors (ADs) by exploring an unexpected policy shock that forces ADs to resign from Chinese listed firms. Around the announcement of the policy, stock prices of firms with ADs drop by 2.2%, which translates to a loss of 135M RMB...

This paper investigates the value of academic independent directors (ADs) by exploring an unexpected policy shock that forces ADs to resign from Chinese listed firms. Around the announcement of the policy, stock prices of firms with ADs drop by 2.2%, which translates to a loss of 135M RMB...