1. 喻曾（2018级博士生）：The effect of Beating Relative Performance Goals on Corporate Investment
2. 吴祯姝（2018级博士生）：ESG, State Ownership, and Stock Returns: Evidence from China
魏旭 中央财经大学金融学院 副教授
朱菲菲 中央财经大学金融学院 助理教授
柯劭婧 中央财经大学金融学院 助理教授
五、主持人：魏旭 中央财经大学金融学院 副教授
1. The effect of Beating Relative Performance Goals on Corporate Investment
This paper exploits a regression discontinuity design to explore the effect of beating relative performance goals on corporate investment activities. Using detailed relative performance evaluation grants of managers (CEOs) between 2001 and 2018, we discover managers who narrowly beat relative performance goals lead to an increase of corporate investment in the following year. Our results also suggest a target-beating manager act myopically after they beat relative performance goals, such as intentionally cut R&D and marketing expensing. We further discover a target-beating manager hire less new-employees to reduce payout, issue more dividend to fool the market and change debt structure to fund the short-term investment activities. Finally, in all target-beating samples, we find a narrowly-beating manager act more myopically than a largely-beating manager. Our findings provide a causal explanation between the effect of relative performance contracts and corporate investment activities, and future improves our understanding on managerial behavior.
2. ESG, State Ownership, and Stock Returns: Evidence from China
This study shows that state ownership affects the impact of environmental, social, and governance (ESG) activities on firm value, using data covering ESG performance of the entire cross-section of China’s stock markets. Taking the COVID-19 market crash as an exogenous shock, we find a positive relationship between ESG and stock returns for non-state-owned enterprises (non-SOEs). The effect does not exist for state-owned enterprises (SOEs). The ESG effects in non-SOEs concentrate on employee relations and information transparency, and depend on institutional investor ownership. Furthermore, we find that ESG predicts positive long-run stock returns and operating performance for non-SOEs, but not for SOEs. The results suggest that state ownership reduces the value of ESG activities.