1. 安苏伟（2018级博士生）：Informativeness of incentive contracts: Relative performance evaluation and stock price crash risk
2. 喻 曾（2018级博士生）：The effect of Beating Relative Performance Goals on Corporate Investment
3. 苏自力（2017级博士生）：Does Share Pledging of Controlling Shareholders Always Destroy Firm Value? Evidence from China's Policy Reforms
丁 娜 中央财经大学金融学院 助理教授
陈宇子 中央财经大学金融学院 助理教授
朱菲菲 中央财经大学金融学院 助理教授
五、主持人：丁 娜 中央财经大学金融学院 助理教授
1. Informativeness of incentive contracts: Relative performance evaluation and stock price crash risk
We study how relative performance evaluation (RPE) affects stock price crash risk. We use a sample of 22,776 US listed firms from 2006 to 2017 and find that firms using RPE exhibit lower levels of stock price crash risk (by about 200% decrease from the mean level). We also demonstrate that only RPE with market-based performance metrics show crash risk reduction effect rather than RPE with accounting-based metrics; and only RPE with benchmarks of self-selected peer groups show crash risk reduction effect rather than RPE with index benchmarks. The RPE-crash risk relation mainly manifests in firms with higher managerial ability, higher industry competition, and higher managerial myopia correctability. We further illustrate the market pressure as the primary channel relative to the industry tournament. Finally, we demonstrate that RPE firms are associated with higher information disclosure quality and lower analyst optimism.
2. 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 future corporate investment, and simultaneously result in inefficiency in investment. Our results also suggest this causal relation is more pronounced when a firm choose to adopt equity based pay as manager’s reward. 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.
3. Does Share Pledging of Controlling Shareholders Always Destroy Firm Value? Evidence from China's Policy Reforms
This paper explores the impact of the 2018 share pledging policy reforms on the motivation of controlling shareholders in China, using data that span the period 2015 to 2020. We provide evidence that the stricter regulatory requirements alleviate the destructive impact of controlling shareholders activities on the firm value whilst at the same time positively influences it. Channel tests reveal that policy reforms reverse controlling shareholders behaviors through reduce the stock price crash risk and mitigate agency conflicts between them and minority shareholders. Heterogeneity analysis indicates that financing constraints and equity incentives also impact the effectiveness of policy reform.