Prof. Anthea Zhang (Rice University)

Programm

• Datum: 20.05.2010
  Zeit: 17:15 - 18:45
  Ort: Raum 305, Ludwigstr.28, Vordergebäude

The Role of Foreign firms' Age and Location in FDI Spillovers in an Emerging Market: A Longitudinal Study

In this Study, we advance FDI spillover literature by examining how foreign firms’ age distribution and location can affect their spillovers in an emerging market. Using panel data on Chinese manufacturing firms (1998—2003), we find that foreign firms’ average age has a positive relationship with the productivity of domestic firms and this relationship becomes weaker as the average age increases. We also find that foreign firms’ age heterogeneity has a positive relationship with domestic firms’ productivity. Furthermore, we find that co-location of foreign firms and domestic firms enhances the positive effect of foreign firms’ average age.

• Datum: 21.05.2010
  Zeit: 15:00 - 17:00
  Ort: Raum 305, Ludwigstr.28, Vordergebäude

CEO Dismissal: The Role of Investment Analysts

While poor firm performance has been shown to be an important predictor of CEO dismissal, financial performance alone cannot explain the increased willingness on the part of the board of directors to dismiss the firm’s CEO.  The complex and ambiguous relationship between poor firm performance and CEO dismissal is due in part to the uncertainty that surrounds the board’s evaluation of the firm’s CEO.  In this study, we propose that investment analysts, as important information intermediaries in the financial market, can influence a board’s decision to dismiss the CEO.  As legitimate third party evaluators of the firm and its leadership, investment analysts provide certification as to the CEO’s ability, or lack thereof, and thus help reduce the ambiguity associated with the board’s evaluation of the CEO’s efficacy. In addition, the board tends to respond to investment analysts because their stock recommendations influence investors, whom the board wants to appease.  Using panel data on the S&P 500 companies for the 2000-2005 time period, we find that negative analyst recommendations result in a higher probability of CEO dismissal.  In addition, we find that the firm’s prior financial performance (i.e., prior stock return) moderates the effects of analyst recommendations on CEO dismissal.  Finally, we find that the 2002 litigation against investment analysts led to a reduction in their credibility; consequently, negative analyst recommendations had a weaker impact on CEO dismissal in the post-litigation period when compared to the pre-litigation period.