Non-controlling shareholders' governance participation and corporate misconduct: Evidence from voting in general meetings

Qiaoshan Lu, Cheng Xiang, Bingxiang Li and Lixuan Feng

Pacific-Basin Finance Journal, 2023, vol. 81, issue C

Abstract: This study explores the governance role of non-controlling shareholders (NCSs) in Chinese firms by examining the impact of their general meeting participation on corporate misconduct. We find that higher NCS voting shares lead to less corporate misconduct, and the impact is more pronounced for firms with worse internal control or audit quality and less analyst or media coverage. The two-stage regression results based on the instrumental variable approach suggest that the impact is casual. Channel tests show that NCSs' general meeting participation reduces misconduct by mitigating controlling shareholders' tunneling and improving firms' information environment. Finally, we document that the negative impact of NCSs' governance participation on corporate misconduct increases firm value by reducing the firm's future stock price crash risk.

Keywords: Non-controlling shareholders; General meetings; Shareholder activism; Corporate misconduct; China (search for similar items in EconPapers)
JEL-codes: G18 G34 G38 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X23001890
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:81:y:2023:i:c:s0927538x23001890

DOI: 10.1016/j.pacfin.2023.102118

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().