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: The associations between physical-test performance and match performance in women’s rugby sevens players

authors: Sella, Francesco Stefano

abstract: Evaluating the relationships between physical-test and match performance in team sports could be useful for training prescription and athlete evaluation. Here we investigated these relationships in women’s Rugby Sevens. Thirty provincial-representative players performed Bronco-fitness, countermovement-jump, acceleration, speed, and strength tests within two weeks before a two-day tournament. Match-running and match-action performance measures were provided by GPS units and video analysis. Generalised and general linear mixed models were employed to estimate the effect of a two standard-deviation difference in physical test measures on match measures. Effect magnitudes were assessed via standardisation (using the between player SD) and, for effects on tries scored, also via match winning (based on simulating matches). Evidence for substantial and trivial true magnitudes was provided by one-sided interval-hypothesis tests and Bayesian analysis. There was good evidence of positive effects of many physical-test measures on match high-intensity running, with large effects for jump height and acceleration. There was some evidence of small-moderate positive effects of speed and Bronco, and of small-moderate negative effects of maximal strength and jump height, on match total running and high intensity changes in speed. The evidence was generally inadequate for associations between physical-test measures and match actions, but there was good evidence of small-large positive effects of back squat and jump height on tries scored. Enhancing players’ jump height and back-squat performance might therefore increase the likelihood of match success in women’s Rugby Sevens.

text: The associations between physical-test performance and match performance in women’s rugby sevens players Evaluating the relationships between physical-test and match performance in team sports could be useful for training prescription and athlete evaluation. Here we investigated these relationships in women’s Rugby Sevens. Thirty provincial-representative players performed Bronco-fitness, countermovement-jump, acceleration, speed, and strength tests within two weeks before a two-day tournament. Match-running and match-action performance measures were provided by GPS units and video analysis. Generalised and general linear mixed models were employed to estimate the effect of a two standard-deviation difference in physical test measures on match measures. Effect magnitudes were assessed via standardisation (using the between player SD) and, for effects on tries scored, also via match winning (based on simulating matches). Evidence for substantial and trivial true magnitudes was provided by one-sided interval-hypothesis tests and Bayesian analysis. There was good evidence of positive effects of many physical-test measures on match high-intensity running, with large effects for jump height and acceleration. There was some evidence of small-moderate positive effects of speed and Bronco, and of small-moderate negative effects of maximal strength and jump height, on match total running and high intensity changes in speed. The evidence was generally inadequate for associations between physical-test measures and match actions, but there was good evidence of small-large positive effects of back squat and jump height on tries scored. Enhancing players’ jump height and back-squat performance might therefore increase the likelihood of match success in women’s Rugby Sevens.

year: 2022-11-18

title: Waikato shallow lakes modelling

authors: Lehmann, Moritz K.

subjects: Lakes

abstract: The principal aim of this study is to apply a modelling approach to identify, evaluate and prioritise specific in-lake and catchment restoration options which could be applied to improve the water quality and ecological health of peat and riverine lake types across the Waikato Region. Four representative lakes have been selected as case studies for this work based on their social, cultural and ecological significance, as well as the availability of historical monitoring data and the potential transferability of the study findings to similar lake systems. The lakes include Rotomānuka, Ngāroto, Waahi and Waikare.

text: Waikato shallow lakes modelling The principal aim of this study is to apply a modelling approach to identify, evaluate and prioritise specific in-lake and catchment restoration options which could be applied to improve the water quality and ecological health of peat and riverine lake types across the Waikato Region. Four representative lakes have been selected as case studies for this work based on their social, cultural and ecological significance, as well as the availability of historical monitoring data and the potential transferability of the study findings to similar lake systems. The lakes include Rotomānuka, Ngāroto, Waahi and Waikare.

year: 2017