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In this paper, we test the hypothesis that business-friendly local-government policies combined with weak legal institutions lead to lower economic welfare in the form of greater fraud activity. Using data of almost 3000 failed peer-to-peer (P2P) lending platforms in China, labeled as “runaways”, we find that they are more prevalent in provinces with business-friendly policies with weak law-enforcement regimes.
Mengyin Li; Phillip Phan; Xian Sun. Business Friendliness: A Double-Edged Sword. Sustainability 2021, 13, 1819 .
AMA StyleMengyin Li, Phillip Phan, Xian Sun. Business Friendliness: A Double-Edged Sword. Sustainability. 2021; 13 (4):1819.
Chicago/Turabian StyleMengyin Li; Phillip Phan; Xian Sun. 2021. "Business Friendliness: A Double-Edged Sword." Sustainability 13, no. 4: 1819.
We model an investment bank's choice of resource allocation by the probability of acquirers' mergers and acquisitions frequency in the future to theoretically link the role of investment banks to the acquirer returns. Our model predicts the heterogeneity in the quality of advisory services provided by the same investment bank that leads to the heterogeneity in acquirer returns. Such heterogeneity declines as the likelihood of an industry merger wave rises. Controlling for investment bank fixed effects, acquirer fixed effects and potential self-selection bias, we find empirical evidence supporting our hypotheses.
Qi Liu; Xian Sun; Hong Wu. Premier advisory services for VIP acquirers. Journal of Corporate Finance 2018, 54, 1 -25.
AMA StyleQi Liu, Xian Sun, Hong Wu. Premier advisory services for VIP acquirers. Journal of Corporate Finance. 2018; 54 ():1-25.
Chicago/Turabian StyleQi Liu; Xian Sun; Hong Wu. 2018. "Premier advisory services for VIP acquirers." Journal of Corporate Finance 54, no. : 1-25.
Our research suggests that firms condition their CSR policies on the availability of economic resources. Using the value of a firm's real estate as a measure of exogenous shocks on the firm's economic resources, we show that increases in resources reduce CSR concerns, while decreases in resources increase CSR concerns. The relative impact of resource availability on CSR concerns, however, depends on several organizational variables that influence a firm's preferences for CSR investments. Furthermore, we show that firm reactions to increases and decreases in resources are not symmetric: resource gains reduce CSR concerns, but resource losses increase CSR concerns even more markedly. Overall, these results suggest that firms may treat CSR decisions in much the same way as other investment decisions.
Xian Sun; Brian C. Gunia. Economic resources and corporate social responsibility. Journal of Corporate Finance 2018, 51, 332 -351.
AMA StyleXian Sun, Brian C. Gunia. Economic resources and corporate social responsibility. Journal of Corporate Finance. 2018; 51 ():332-351.
Chicago/Turabian StyleXian Sun; Brian C. Gunia. 2018. "Economic resources and corporate social responsibility." Journal of Corporate Finance 51, no. : 332-351.
Investments in research and development (R&D) are essential to innovation, long-term value creation, and wealth accumulation. Since family wealth and firm performance are tightly coupled in family firms, how they invest during times of economic distress matters to their wealth accumulation over the generations. In this study, we examined the impact of the 2007 Great Recession on the R&D decisions of publicly-listed family firms in the United States. We compared family and non-family U.S. firms, excluding those in the financial sector, with total assets greater than $1 million for the period 1992 to 2015. Using the behavioral agency model, we hypothesized that among firms that were not financially constrained during the economic crisis, family firms were more likely than non-family firms to invest in R&D. The results support this hypothesis, lending credence to the notion that family firms undertook more risks when performance is below their long-term aspirations during economic downturns.
Xian Sun; Soo-Hoon Lee; Phillip H. Phan. Family firm R&D investments in the 2007–2009 Great Recession. Journal of Family Business Strategy 2018, 10, 100244 .
AMA StyleXian Sun, Soo-Hoon Lee, Phillip H. Phan. Family firm R&D investments in the 2007–2009 Great Recession. Journal of Family Business Strategy. 2018; 10 (4):100244.
Chicago/Turabian StyleXian Sun; Soo-Hoon Lee; Phillip H. Phan. 2018. "Family firm R&D investments in the 2007–2009 Great Recession." Journal of Family Business Strategy 10, no. 4: 100244.
We study how state ownership affects the post-merger performance of Chinese acquirers, and find that state owned acquirers (SOEs) experience a significantly larger long-term performance improvement following mergers compared to their non-state-owned counterparts (NSOEs). When partitioning the sample period into acquisitions made prior to and following China's split-share reform of 2005, we find that the post-merger performance improvement of SOE acquirers is largely attributed to the post reform period in which controlling shareholders converted their non-tradable shares into tradable status. Our results are consistent with the interpretation that state intervention in the form of capital market liberalization and alleviation of governance problems, combined with political connections and privileged access to financing may have a positive effect on M&A performance that outweighs the inefficiency cost of state ownership in China.
Ming Ma; Xian Sun; Maya Waisman; Yun Zhu. State ownership and market liberalization: Evidence from China's domestic M&A market. Journal of International Money and Finance 2016, 69, 205 -223.
AMA StyleMing Ma, Xian Sun, Maya Waisman, Yun Zhu. State ownership and market liberalization: Evidence from China's domestic M&A market. Journal of International Money and Finance. 2016; 69 ():205-223.
Chicago/Turabian StyleMing Ma; Xian Sun; Maya Waisman; Yun Zhu. 2016. "State ownership and market liberalization: Evidence from China's domestic M&A market." Journal of International Money and Finance 69, no. : 205-223.
We show that firms led by politically partisan CEOs are associated with a higher level of corporate tax sheltering than firms led by nonpartisan CEOs. Specifically, Republican CEOs are associated with more corporate tax sheltering even when their wealth is not tied with that of shareholders and when corporate governance is weak, suggesting that their tax sheltering decisions could be driven by idiosyncratic factors such as their political ideology. We also show that Democratic CEOs are associated with more corporate tax sheltering only when their stock-based incentives are high, suggesting that their tax sheltering decisions are more likely to be driven by economic incentives. In sum, our results support the political connection hypothesis in general but highlight that the specific factors driving partisan CEOs’ tax sheltering behaviors differ. Our results imply that it may cost firms more to motivate Democratic CEOs to engage in more tax sheltering activities because such decisions go against their political beliefs regarding tax policies.
Bill B. Francis; Iftekhar Hasan; Xian Sun; Qiang Wu. CEO political preference and corporate tax sheltering. Journal of Corporate Finance 2016, 38, 37 -53.
AMA StyleBill B. Francis, Iftekhar Hasan, Xian Sun, Qiang Wu. CEO political preference and corporate tax sheltering. Journal of Corporate Finance. 2016; 38 ():37-53.
Chicago/Turabian StyleBill B. Francis; Iftekhar Hasan; Xian Sun; Qiang Wu. 2016. "CEO political preference and corporate tax sheltering." Journal of Corporate Finance 38, no. : 37-53.
We examine the relevance and effectiveness of stock return correlations among financial institutions as an indicator of systemic risk. By analyzing the trends and fluctuations of daily stock return correlations and default correlations among the 22 largest bank holding companies and investment banks from 1988 to 2008, we find that daily stock return correlation is a simple, robust, forward-looking, and timely systemic risk indicator. There is an increasing trend in stock return correlation among banks, whereas there is no obvious correlation trend among non-banks. We also disaggregate the stock returns into systematic and idiosyncratic components and find that the correlation increases are largely driven by the increases in correlations between banks’ idiosyncratic risks, which give rise to increasing systemic risk. Correlation spikes tend to predict or coincide with significant economic or market events, especially during the 2007–2008 financial crisis. Furthermore, we show that stock return correlations offer a perspective on the level of systemic risk in the financial sector that is not already captured by default correlations. Stock return correlations are not subject to data limitations or model specification errors that other potential systemic risk measures may face. Therefore, we recommend that regulators and businesses monitor daily stock return correlations among those large and highly leveraged financial institutions to track the level of systemic risk.
Dilip K. Patro; Min Qi; Xian Sun. A simple indicator of systemic risk. Journal of Financial Stability 2013, 9, 105 -116.
AMA StyleDilip K. Patro, Min Qi, Xian Sun. A simple indicator of systemic risk. Journal of Financial Stability. 2013; 9 (1):105-116.
Chicago/Turabian StyleDilip K. Patro; Min Qi; Xian Sun. 2013. "A simple indicator of systemic risk." Journal of Financial Stability 9, no. 1: 105-116.