research proposal-sample-good

Topics: Corporate governance, Empirical, Board of directors Pages: 13 (2609 words) Published: December 18, 2013
对外经济贸易大学
University of International Business and Economics

硕士论文开题报告
Executive Compensation and Incentives:
Evidence from Mergers and Acquisitions in
China’s Listed Companies
(高管薪酬与激励:来自中国上市公司并购
交易的经验证据)

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Contents
1. Introduction ……………………………………………………………………… 1 2. Literature Review …………………………………………………………………2 3. Methodology…………………………………………………………………… 4 4. Expectations………………………………………………………………………8 References ………………………………………………………………………… 9





一、前言 ………………………………………………………………………… 1 二、文献回顾 ……………………………………………………………………2 三、研究内容与方法……………………………………………………………… 4 四、结言 ………………………………………………………………………8 参考文献 ……………………………………………………………………… 9

Executive Compensation and Incentives: Evidence from Mergers and Acquisitions in China’s Listed Companies
(高管薪酬与激励:来自中国上市公司并购交易的经验证据) 开题报告

1. Introduction

The subject of executive compensation has been a hot topic in financial studies. Jensen and Ruback (1983) stated that “examination of the costs and benefits to competing management teams of success or failure in the takeover market will aid in understanding the forces that determine when and why takeovers are initiated, and why target managers oppose or acquiesce to such proposals.”

Prior research has established possible links between executives’ self-interest and M&A activities. Main driving factors of executives making mergers and/or acquisitions have been identified: hubris (Malmendier and Tate, 2008), diversification of personal risk (Morck et al. 1990; May, 1995), and the additional compensation associated with size (Murphy, 1985). Specifically, using Western data, prior research has provided empirical evidence on the relationship of executives’ compensation and firms’ M&A activities. For example, Grinstein and Hribar (2004) show that bidder CEOs receive higher bonus compensation when M&A deals are larger; their results suggest that managerial power plays a significant role in determining M&A bonuses. Hartzell et al. (2004) document that target CEOs obtain increasing wealth by sacrificing to sell their firms.

As for China’s listed firms, the empirical evidence on whether right mergers and acquisitions took place is mixed in China. There is evidence that efficient firms acquired or merged less efficient firms in China (Li et al. 2003; Zhang, 2003). Also, there is evidence that in a long-term perspective the mergers and acquisitions did not improve firms’ performance (Feng and Wu, 2001).

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This requires us to take a closer look at the misalignment between firms’ performance after M&A deals and executive compensation. However, little is known about the relationship of executives’ personal benefits and M&A deals in China, especially compared to Anglo-Saxon economies. Few researchers, to my knowledge, have provided empirical evidence explaining the potential link. 1 Therefore, I try to contribute to existing literature by analyzing the explanation that executives’ compensation is associated with firms’ M&A activities in China and try to provide empirical evidence in China’s listed firms.

In this paper, I describe the private benefits available to executives of bidding firms after mergers and acquisitions, and ask how these private benefits affect managerial decision to engage in M&A deals. The paper tries to provide insight to the relationship between executives’ personal benefits and M&A deals by addressing the following questions. Firstly, does executives’ personal benefits affects firms’ managerial decisions of making mergers and acquisitions? Secondly, how does executives’ personal benefits affect firms’ mergers and acquisitions and to what extent?

The rest of the paper will be organized as follows. The next section provides a literature review. Section 3 presents sample selection and empirical approach. Section 4 discusses the empirical outcome and the final section concludes.

2. Literature Review

2.1 Executive Compensation and Incentives

Compensation decisions are usually made by a board of...

References: [1] Bliss, Richard T. and Rosen, Richard J., “CEO Compensation and Bank Mergers,”
Journal of Financial Economics 61, 2001, pp.107–138.
[2] Chhaochharia,Vidhi and Grinstein, Yaniv, “CEO Compensation and Board Structure,”
Journal of Finance 64, 2009, pp.231–261.
[3] Fama, Eugene F. and Michael C. Jensen, “Separation of ownership and control,” Journal
of Law and Economics 26, 1983, pp.301–325.
[4] Grinstein, Yaniv and Hribar, Paul, “CEO compensation and incentives: Evidence from
M&A bonuses,” Journal of Financial Economics 73, 2004, pp.119–143.
[5] Harford, Jarrad and Li, Kai, “Decoupling CEO Wealth and Firm Performance: The Case
of Acquiring CEOs,” Journal of Finance 2, 2007, pp.917–949.
banking industry,” Journal of Financial Economics 39, 1995, pp.105–130.
[7] Jensen, Michael C. and Ruback, Richard S., “The Market for Corporate Control: The
Scientific Evidence,” Journal of Financial Economics 11, 1983, pp.5–50.
[8] Lambert, Richard, Larcker, Davidand and Verrecchia,Robert , “Portfolio Considerations in
Valuing Executive Compensation,” Journal of Accounting Research 29, 1991,
[9] Malmendiera, Ulrike and Tate, Geoffrey, “Who makes acquisitions? CEO
Overconfidence and the Market 's Reaction,” Journal of Financial Economics 89, 2008,
of Finance 50, 1995, pp.1291–1308.
[11] Mehran, H., “Executive Compensation Structure, Ownership, and Firm Performance,”
Journal of Financial Economics 38, 1995, pp.163–184.
[12] Morck, R., Shleifer, A. and Vishny, R.W., “Do Managerial Objectives Drive Bad
Acquisitions? ” Journal of Finance 45, 1990, pp.31–49.
[13] Murphy, K., “Corporate performance and Managerial Remuneration,” Journal of
Accounting and Economics 7, 1985, pp.11–42.
[14] Ozkan, Neslihan, “CEO Compensation and Firm Performance: An Empirical
Investigation of UK Panel Data,” European Financial Management 17, 2009,
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