Search

In China, a mandatory dual audit system for domestic A-share firms cross-listed on the Hong Kong stock market (i.e. AH companies) was abolished in 2010. Since then, AH companies have been allowed to choose to have a dual audit or a single audit. We find that the mandatory dual audit regime before the deregulation is associated with a lower cost of equity than voluntary dual audit after the deregulation. Furthermore, the lower cost of equity under the mandatory dual audit regime is greater in companies exposed to stronger financial constraints and with higher agency costs, and is not attenuated by alternative voluntary audits. Our results are not affected by accounting standards convergence and audit quality, and are robust to various model specifications. Our results suggest that the role of mandatory dual audit in mitigating agency costs and information asymmetry is not replaceable by voluntary dual audit. [ABSTRACT FROM AUTHOR]

• An optimal width allocation policy for traffic lanes and footpaths is developed. • Optimal lane width is 5.4 m when user and agency costs are equally important. • Hong Kong road agency places a higher weight on each dollar of user cost. • Allocation to footpaths can reflect the importance placed on pedestrian safety. Introduction: Walkability continues to attract great attention from urban planners, designers, and engineers as they recognize not only the merits of pedestrian facilities in terms of the health benefits but also their demerits in terms of accident risk to pedestrians. Wide footpaths improve the pedestrian environment and experience, and thereby motivate travelers to walk as much as possible. However, if footpaths are too wide, they may leave a smaller space for the roadway. On the other hand, wide road lanes may lead to higher road vehicle safety but are costly to construct and maintain and also may leave little space for the footpath. Evidently, for a fixed urban space, what is needed is an optimal balance between the vehicle lane and pedestrian path. This problem is encountered routinely in dense cities including Hong Kong where land availability is severely limited. Method: To address the issue, this paper first establishes safety performance functions (SPFs) for the pedestrian space and the road space, using the random-parameter negative binomial regression. The results indicate the extent to which road lane and footpath width changes are associated with changes in in-vehicle occupant and pedestrian casualties. Then the paper uses the SPFs to develop a methodology for optimizing the width allocations to the road lanes and footpaths, duly considering the user (safety) costs and agency (construction) costs associated with each candidate allocation of the widths. Finally, the paper analyzes the sensitivity of the optimal solution to the relative weights of user cost and agency cost. Results: When user and agency costs are considered equally important, the optimal lane width is 5.4 m. Conclusion: It is observed that the road space allocation ratio used by the Hong Kong road agency suggests that the agency places a higher weight to user cost compared to agency cost. Practical Application: The findings can help incorporate design-safety relationships, and the stakeholders (agency and users) perspectives in urban road and footpath design. [ABSTRACT FROM AUTHOR]

Dual-class stock (DCS) structures, and their implications for managerial accountability and corporate governance more broadly, have become prevalent concerns for corporate lawyers and policymakers. Recent academic and practitioner debates on DCS have tended to focus less on the general merits and drawbacks of DCS versus one share/one vote structures, and more on the specific common-ground concern as to whether and how such structures are subjected to contingent reversal or "sunset". This Article compares the relative advantages and disadvantages of time-, ownership- and transfer-centered models of DCS sunset provisions. It argues in favor of the transfer-centered model on the grounds that: (a) its specific event-based trigger renders it less arbitrary in application than the time-centered model, and protects against the possibility of founders being prevented prematurely from realizing their long-term strategic vision (as is a risk with the time-centered sunset model); (b) it avoids the moral hazard and other perverse controller incentives that are prone to ensue from time-centered sunsets; and (c) unlike both the time- and ownership-centered models (which are motivated primarily by agency cost concerns), the transfer-centered model is sensitive to the powerful non-financial incentives that controllers typically have to safeguard and promote firm value, even where their corporate control rights significantly outweigh their corresponding cash flow rights. Accordingly, it suggests that the SEC and principal U.S. exchanges should resist recent calls from influential investor-related bodies to mandate time-based sunsets. Instead, domestic policymakers should look overseas to Hong Kong and Singapore, whose respective listing authorities have recently introduced transfer-based sunset requirements for DCS issuers, in considering the most appropriate blueprint for any future regulatory initiatives in this regard. [ABSTRACT FROM AUTHOR]

Background of Problem: This research investigates the corporate governance and performance between founding family firms and non-founding family firms in Hong Kong, and the performance inside founding family firms under three different management status. Agency costs will be generated by the divergence between CEO interest and those of the outside shareholders if the owner-manager sells equity claims on the corporation. There are two different mainstreams of views regarding relationships between ownership and performance in family business: negative and positive effect generated from family ownership and control. To what extents the two different views are relevant to Hong Kong family firms are still unclear. Research Method and Data: By focusing on Hong Kong business, this research seeks to study 75 Hong Kong listed companies in HSCII for 5 years, yielding 347 observations, using archival data. The empirical result suggests that the founding family firms in Hong Kong may not outperform nonfamily firms, and the founding family firms with founders as CEOs are one of best performers among founding family firms. This research not only studies the performance behaviours of Hong Kong founding/ non-founding family business and inside founding family business, but also sets a foundation for further research. This research gives insights for entrepreneurs to manage their businesses and plan the succession of founding family business in Hong Kong. This research into corporate governance is different to that of countries such as USA, Taiwan, and Mainland China. The founding family firms in Hong Kong may not outperform the nonfamily firms and the founding family firms with the founder as CEO is one of the best management techniques inside founding family firms. This research shows agency costs inside founding family firms affects performance and succession of family firms, as descendants may not be the best successors for firm value maximization, and business continuity. Owners of Hong Kong founding family business should pay more attention on business governance and succussion planning. [ABSTRACT FROM AUTHOR]

Eco-certification schemes are usually launched with various incentives provided by local governments to facilitate green building development and building energy retrofits. A number of barriers to building energy retrofitting have been identified in previous literature, while the barriers to the eco-certification of existing buildings are under-researched. Drawing on a set of building data retrievable from the BEAM Society and other sources, we carried out an analysis and found the building energy retrofitting, as well as the certification process, were unwelcomed in multi-owned residential buildings. The identified shortfall is put forward from the perspectives of transaction cost theory and agency theory. The findings reveal that high transaction costs incurred during negotiations and coordination among a large number of co-owners within a typical apartment building can outweigh the benefits of retrofitting and eco-certification. Besides, the remuneration structure of third-party property management agents discourages agents from facilitating co-owners to initiate retrofitting. This study provides significant implications for policymakers to understand the concerns of building owners and managers over the decisions and the processes of both the building energy retrofits and eco-certification. The problems and barriers unveiled in this study will facilitate the refining of current energy efficiency policies and related incentives designs. [ABSTRACT FROM AUTHOR]