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Board Structure and Intragroup Propping: Evidence from Family Business Groups in Hong Kong
| Content Provider | Semantic Scholar |
|---|---|
| Author | Cheung, Yan Leung Stephen Tan, Wei-Qiang Wang, Wenming |
| Copyright Year | 2014 |
| Abstract | type="main"> Using earnings announcement events made by group member firms in Hong Kong, this study examines the governance role of boards of directors in curbing propping activities within family business groups. We find that earnings released by group member firms affect the stock prices of their nonannouncing group peers in a manner consistent with intragroup propping. More importantly, this effect is less pronounced when the announcing firms have a larger board or a board with a higher proportion of independent directors, but more pronounced when they have an executive director from their controlling families acting as board chairperson. Furthermore, the monitoring effect of boards of directors is strengthened for firms subject to new regulations increasing board power. Our results suggest that board oversight can mitigate propping activities. |
| Starting Page | 569 |
| Ending Page | 601 |
| Page Count | 33 |
| File Format | PDF HTM / HTML |
| DOI | 10.1111/fima.12034 |
| Alternate Webpage(s) | https://repository.hkbu.edu.hk/cgi/viewcontent.cgi?article=3654&context=hkbu_staff_publication |
| Alternate Webpage(s) | https://doi.org/10.1111/fima.12034 |
| Volume Number | 43 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
