As a growth and strength from an enterprise, the businesses are numerous, the organization is larger, and the financial strategies are complicated as well as the involved beneficial stakeholders are multitudinous. Although a variety of academic literatures of finance and banking has been discussed related to different types of beneficial stakeholders previously, they obviously focused relevant issues on stockholders and higher levels of executive managers. However, the enterprise is necessary to cope with its debtees, suppliers, customers, researchers/inventors and employees and these stakeholders are not only closely bound up with financial strategies of enterprise but also influence its prospective development and performance. For the sake of the statement above, the《Journal of Management and Business Research》has a special issue of the「Corporate Financial Decisions and Stakeholders: The Role of Corporate Governance」and widely invited scholars from the related fields and contributed their original theories and empirical papers.
The special issue has been supported by a number of scholars from relevant fields through an 8-month nearly to call on submission at public since March, 2020 and received 37 manuscripts. After an anonymous reviewing procedure carefully, the reviewing board offers objective, impartial, and constructive suggestions to improve the qualities of manuscripts continuallyafter implementing 71 reviews. The special issue has published 6 articles finally with an accepted rate at 16.2% entirely. The special issue has been published smoothly and brought a tiny academic contribution to relevant researches due to all submitters and reviewing committees', specially, comments and instructions. In the sequence of arranging articles in this issue, it begins a research at the contained benefitable stakeholders, such as suppliers, employees, further discussion at a topic of the board of director, and outreach at the dimension of the corporate social responsibility extensively.
The first article is titled in “The Effects of Supplier R&D Capitalization on the Trade Credit and the Duration of Customer-Supplier Relationships”.Suppliers can signal the market as to their R&D capabilities by capitalizing their R&D expenditures. In this study aims to examine the effect of supplier firms' R&D capitalization on customer-supplier relationships from two perspectives: trade credit and relationship continuity.Using a sample of U.S. software firms from 2001 to 2012, the research documents a negative relationship between a supplier's R&D capitalization and the provision of trade credit to customers. The results suggest that suppliers who capitalize R&D expenditures are perceived by customers as having higher innovation capabilities and thereby given higher bargaining power, which induces customers to settle accounts payable more quickly and to be more willing to continue the business relationship.
The second article is titled in “The Effects of Employee Turnover and Nonmanagement Employee Salaries on Corporate Tax Avoidance”.Employee human capital is a critical corporate intellectual asset and the turnover of employee and salaries are important to corporate human resource management.Using the samples from Taiwanese listed and OTC companies from 2010 to 2019, the research investigate the relations between employee turnover, salaries of full-time nonmanagement employees, and corporate tax avoidance. The research finds that firms with higher employee turnover tend to have lower corporate tax avoidance. Furthermore, firms with higher salaries for full-time nonmanagement employees tend to have lower corporate tax avoidance.
The third article is titled in “Pay Fairness: The Impact of Employee Productivity and the Separation of Control and Cash Flow Rights”.The study explores the impact of abnormal top management compensation, the separation of control and cash flow rights, and employee productivity on employee pay, as well as examine whether employee productivity and the separation moderate the effect of abnormal top management compensation on employee pay. Applying non-financial firms listed on the Taiwan Stock Exchange, the study finds that abnormal top management compensation and employee pay are complementary to each other. The separation and employee productivity are positively associated with employee pay, showing that both managerial entrenchment and employee contribution play a vital role in determining employees' salary contracts. Also, the study finds that the separation and employee productivity positively moderate the effect of abnormal top management compensation on employee pay, implying that either widening the gap between control and cash flow rights or improving employee productivity can reduce pay disparity or improve pay fairness.
The fourth article is titled in “Equity-based Compensation of Outside Directors and Corporate Tax Avoidance”.This study examines whether outside directors' equity-based compensation is associated with a firm's tax avoidance at American firms.The study finds that firms paying a higher fraction of their outside director compensation in the form of equity have lower long-run effective tax rates. Moreover, the positive effect of outside director equity incentives on tax avoidance is more pronounced in firms adopting a defender-type business strategy and in firms that are more financially constrained. The empirical analysis demonstrates that equity-based compensation helps motivate outside directors to provide better advising and monitoring so that managers engage in more tax avoidance to maximize shareholder wealth.
The fifth article is titled in “Board of Directors and Credit Risk-Taking: Evidence from Taiwanese Commercial Banks”.This study explores the influence of the board of directors at credit risk-taking by using a sample of Taiwanese commercial banks between 2006 and 2018, this study finds evidence of a link between risk-taking behavior and multiple board characteristics that enhance board monitoring. Risk-taking behavior is measured in terms of the average credit rating of the borrowing firms. The level of risk-taking decreases as the proportion of independent directors, financial expertise directors, insider directors, and female directors increases. Risk-taking increases in the percentage of shares pledged by directors.The research results also indicate that board independence, expertise, and directors' pledging of shares are the main factors that contribute to the effective monitoring of credit risk, and suggest that policy makers may effectively target bank risk-taking policy through regulating board structure.
The sixth article is titled in “The Impact of Corporate Social Responsibility Awards on Corporate Misbehavior”. To win a CSR awards can increase corporate's public attention and gain the social trust and reputation.The study explores the relationships between the award-winning firms and misbehaviors at firms listed on the Taiwan Stock Exchange from the years of 2005 to 2018. The study shows that firms' misbehaviors are significantly associated with the effect of CSR winners, including three possible channels: financial restatement, financial distress, and other negative misbehavior. Furthermore, the relationship between CSR awards and corporate wrongdoing is more pronounced for firms winning their first CSR award.
Special Issue Editors
Keng-Yu Ho, Professor of Department of Finance, National Taiwan University
Yanzhi Andrew Wang, Professor of Department of Finance, National Taiwan University