title: Earnings management and agency costs: Evidence from China

authors: Man, Yimei

subjects: earnings management

abstract: Based on agency theory, this thesis investigates the link between agency costs and earnings management (EM) using data from listed public companies in China from 1999 to 2014. In this thesis, I examine whether EM reduces agency costs in China, where companies suffer from agency problems. Using static and dynamic models to test the agency costs/EM nexus, I find a significant and positive relationship between agency costs and EM based on a static model that suggests opportunistic EM in China. These results are consistent with suggestions in the literature that EM can be used opportunistically by managers with regard to agency costs (e.g., Dechow & Sloan, 1991; Guidry, Leone, & Rock, 1999; Healy, 1985; Holthausen, Larcker, & Sloan, 1995). However, I find an insignificant relationship between agency costs and EM using a dynamic model that takes into account the endogeneity issue. Therefore, my results suggest that engagement in EM has no significant influence on agency costs in China. Furthermore, board size, board independence, firm size, leverage and CEO duality, which are conventionally thought to be important in explaining agency costs, do not have a significant impact. The results add support to the growing literature on the relevance of endogeneity issues in corporate governance studies, since failing to take these into account can lead to spurious results.
This thesis examines both principal-agent and principal-principal agency costs. The concept of traditional principal-agent agency conflict caused by the separation of ownership and management was conceived in a developed market context. However, in emerging economies, principal-principal agency conflicts are the major concerns in corporate governance. Emerging economies are characterized by weak legal protection, high information asymmetry, and concentrated ownership structures, which provide the economic and institutional roots for principal-principal agency conflicts. 
Based on agency theory, Jiraporn, Miller, Yoon, and Kim (2008) relate agency costs to the extent of EM, and find the practice of EM, on average, reduces agency conflicts in the U.S. In emerging economies, with weak institutional environments and highly concentrated ownership structures, managers become affiliated to the dominant shareholders, and principal-principal agency costs become prevalent. As in other emerging economies, the Chinese market is also subject to characteristics such as highly concentrated ownership structures, weak protection for minority shareholders and uneven legal enforcement.  Therefore, this thesis accommodates principal-agent and principal-principal agency costs in relation to EM in China. 
The endogeneity issue was the major concern when conducting this study. We add new empirical evidence to support the growing literature on concerns relating to endogeneity issues in corporate governance studies. Consistent with the prior studies of Wintoki, Linck, and Netter (2012) and Schultz, Tan, and Walsh (2010), I show that failing to take endogeneity issues into account can lead to spurious results; therefore, caution must be exerted in making policy implications based on empirical results that fail to address endogeneity issues. I expect my results to be of great interest to academics involved in researching corporate governance topics that have inherited dynamic natures and endogeneity issues. 
As agency cost is a fundamental problem in corporate governance worldwide, this study is expected to be of interest to regulatory and supervisory authorities, investors, and financial analysts. The findings are inconsistent with what is implied by Agency theory, suggesting that corporate governance in China is different; therefore conventional western market theory may not fully incorporate the corporate governance dilemmas prevailing in emerging economies. In agreement with researchers such as Young, Ahlstrom, and Bruton (2004), I suggest that creative solutions need to be explored by emerging economies to resolve their particular agency conflicts in their specific institutional contexts, which indicates fruitful avenues for future research.

text: Earnings management and agency costs: Evidence from China Based on agency theory, this thesis investigates the link between agency costs and earnings management (EM) using data from listed public companies in China from 1999 to 2014. In this thesis, I examine whether EM reduces agency costs in China, where companies suffer from agency problems. Using static and dynamic models to test the agency costs/EM nexus, I find a significant and positive relationship between agency costs and EM based on a static model that suggests opportunistic EM in China. These results are consistent with suggestions in the literature that EM can be used opportunistically by managers with regard to agency costs (e.g., Dechow & Sloan, 1991; Guidry, Leone, & Rock, 1999; Healy, 1985; Holthausen, Larcker, & Sloan, 1995). However, I find an insignificant relationship between agency costs and EM using a dynamic model that takes into account the endogeneity issue. Therefore, my results suggest that engagement in EM has no significant influence on agency costs in China. Furthermore, board size, board independence, firm size, leverage and CEO duality, which are conventionally thought to be important in explaining agency costs, do not have a significant impact. The results add support to the growing literature on the relevance of endogeneity issues in corporate governance studies, since failing to take these into account can lead to spurious results.
This thesis examines both principal-agent and principal-principal agency costs. The concept of traditional principal-agent agency conflict caused by the separation of ownership and management was conceived in a developed market context. However, in emerging economies, principal-principal agency conflicts are the major concerns in corporate governance. Emerging economies are characterized by weak legal protection, high information asymmetry, and concentrated ownership structures, which provide the economic and institutional roots for principal-principal agency conflicts. 
Based on agency theory, Jiraporn, Miller, Yoon, and Kim (2008) relate agency costs to the extent of EM, and find the practice of EM, on average, reduces agency conflicts in the U.S. In emerging economies, with weak institutional environments and highly concentrated ownership structures, managers become affiliated to the dominant shareholders, and principal-principal agency costs become prevalent. As in other emerging economies, the Chinese market is also subject to characteristics such as highly concentrated ownership structures, weak protection for minority shareholders and uneven legal enforcement.  Therefore, this thesis accommodates principal-agent and principal-principal agency costs in relation to EM in China. 
The endogeneity issue was the major concern when conducting this study. We add new empirical evidence to support the growing literature on concerns relating to endogeneity issues in corporate governance studies. Consistent with the prior studies of Wintoki, Linck, and Netter (2012) and Schultz, Tan, and Walsh (2010), I show that failing to take endogeneity issues into account can lead to spurious results; therefore, caution must be exerted in making policy implications based on empirical results that fail to address endogeneity issues. I expect my results to be of great interest to academics involved in researching corporate governance topics that have inherited dynamic natures and endogeneity issues. 
As agency cost is a fundamental problem in corporate governance worldwide, this study is expected to be of interest to regulatory and supervisory authorities, investors, and financial analysts. The findings are inconsistent with what is implied by Agency theory, suggesting that corporate governance in China is different; therefore conventional western market theory may not fully incorporate the corporate governance dilemmas prevailing in emerging economies. In agreement with researchers such as Young, Ahlstrom, and Bruton (2004), I suggest that creative solutions need to be explored by emerging economies to resolve their particular agency conflicts in their specific institutional contexts, which indicates fruitful avenues for future research.

year: 2019

title: Cis-trans ring substituent isomerism in cyano-substituted metallathietane-3,3-dioxide complexes of platinum(II) and palladium(II)

authors: Dowling-Mitchell, Sacha A.M.

abstract: Reactions of the platinum complexes cis-[PtCl₂(PPh₃)₂ ], [PtCl₂(dppf)], or [PtCl₂(dppe)], and the palladium complexes, [PdCl₂(PPh₃)₂] or [PdCl₂(dppe)], with bis(cyanomethyl)sulfone NCCH₂SO₂ CH₂CN  in methanol with added trimethylamine base gave the new cyano-substituted metallathietane-3,3- dioxide complexes [M{CH(CN)SO₂ CH(CN)}L₂ ] (M = Pd, Pt) in good yields and purities. ¹H and ³¹P{¹H} NMR spectroscopy indicates that (in the majority of cases) the products are formed as a mixture of cis and trans isomers, with regard to the disposition of the cyano groups across the four-membered ring. An X-ray structure determination on a crystal of [Pd{CH(CN)SO₂CH(CN)}(PPh₃)₂] showed it to be of the cis isomer, the ﬁrst structurally characterized cis isomer of this type of complex. The four-membered palladacyclic ring is highly planar, in contrast to other metallathietane-3,3-dioxide complexes that have puckered rings. Factors inﬂuencing the relative abundances of the two isomers of [Pd{CH(CN)SO₂CH(CN)}(PR₃)₂] have been investigated by means of NMR spectroscopy and DFT calculations.

text: Cis-trans ring substituent isomerism in cyano-substituted metallathietane-3,3-dioxide complexes of platinum(II) and palladium(II) Reactions of the platinum complexes cis-[PtCl₂(PPh₃)₂ ], [PtCl₂(dppf)], or [PtCl₂(dppe)], and the palladium complexes, [PdCl₂(PPh₃)₂] or [PdCl₂(dppe)], with bis(cyanomethyl)sulfone NCCH₂SO₂ CH₂CN  in methanol with added trimethylamine base gave the new cyano-substituted metallathietane-3,3- dioxide complexes [M{CH(CN)SO₂ CH(CN)}L₂ ] (M = Pd, Pt) in good yields and purities. ¹H and ³¹P{¹H} NMR spectroscopy indicates that (in the majority of cases) the products are formed as a mixture of cis and trans isomers, with regard to the disposition of the cyano groups across the four-membered ring. An X-ray structure determination on a crystal of [Pd{CH(CN)SO₂CH(CN)}(PPh₃)₂] showed it to be of the cis isomer, the ﬁrst structurally characterized cis isomer of this type of complex. The four-membered palladacyclic ring is highly planar, in contrast to other metallathietane-3,3-dioxide complexes that have puckered rings. Factors inﬂuencing the relative abundances of the two isomers of [Pd{CH(CN)SO₂CH(CN)}(PR₃)₂] have been investigated by means of NMR spectroscopy and DFT calculations.

year: 2012

title: Raising Māori Student Achievement - Journeys of Success

authors: Kaumoana, Cadence

abstract: Educational success for Māori students is influenced by confidence in one’s identity, positive role models and support; and positive attitudes to learning and success.
This project asked Māori tertiary graduates about their educational experiences. Half of the participants in this study had successfully completed secondary school and the other half did not complete secondary school education. This selection of participants was selected to highlight that although some students don’t complete secondary school it is still possible to successfully pursue and complete tertiary level qualifications. The feedback given from the participants highlighted the positive factors that influenced their successful completion. From these factors recommendations have been developed to support Māori student success. The objective of this study is to encourage the development of increased self-confidence for Māori rangatahi and to promote the continuation of lifelong learning.
When Māori students are supported both at school and in the home they are more likely to achieve educational success, particularly at secondary school level. Similarly, at tertiary level study; students who graduate with a completed degree qualification are likely to have had positive support and successful role models, they are likely to be secure within their own identity and wh!nau network. Māori students that successfully complete tertiary study are more likely to have positive attitudes to learning and to achieving; knowing how to access support and feeling confident in their efforts.
The key to this study is the link between successful completion of secondary school and the follow-on to successful tertiary study. When Māori students are supported appropriately in the development of their identity their confidence soon follows. This support would ideally come from wh!nau in the home and the school. When Māori students are confident in their learning journeys through high levels of confidence in identity they are more likely to persevere under pressure and despite setbacks.
Influencing factors to developing self-confidence for Māori students include awareness of Te Reo Māori and Tikanga Māori, responsibility at home, responsibility at school and the positive influence of role models. The study then concludes by providing recommendations for learners, educators and wh!nau to support the educational achievement of their tamariki.

text: Raising Māori Student Achievement - Journeys of Success Educational success for Māori students is influenced by confidence in one’s identity, positive role models and support; and positive attitudes to learning and success.
This project asked Māori tertiary graduates about their educational experiences. Half of the participants in this study had successfully completed secondary school and the other half did not complete secondary school education. This selection of participants was selected to highlight that although some students don’t complete secondary school it is still possible to successfully pursue and complete tertiary level qualifications. The feedback given from the participants highlighted the positive factors that influenced their successful completion. From these factors recommendations have been developed to support Māori student success. The objective of this study is to encourage the development of increased self-confidence for Māori rangatahi and to promote the continuation of lifelong learning.
When Māori students are supported both at school and in the home they are more likely to achieve educational success, particularly at secondary school level. Similarly, at tertiary level study; students who graduate with a completed degree qualification are likely to have had positive support and successful role models, they are likely to be secure within their own identity and wh!nau network. Māori students that successfully complete tertiary study are more likely to have positive attitudes to learning and to achieving; knowing how to access support and feeling confident in their efforts.
The key to this study is the link between successful completion of secondary school and the follow-on to successful tertiary study. When Māori students are supported appropriately in the development of their identity their confidence soon follows. This support would ideally come from wh!nau in the home and the school. When Māori students are confident in their learning journeys through high levels of confidence in identity they are more likely to persevere under pressure and despite setbacks.
Influencing factors to developing self-confidence for Māori students include awareness of Te Reo Māori and Tikanga Māori, responsibility at home, responsibility at school and the positive influence of role models. The study then concludes by providing recommendations for learners, educators and wh!nau to support the educational achievement of their tamariki.

year: 2013