We use institutional-related theories and a unique natural experiment that enables an exogenous test of the influence of controlling shareholders on managerial accountability to corporate fraud. In China, prior to the Split Share Structure Reform (SSSR), state shareholders held restricted shares that could not be traded. This restriction mitigated state-owned enterprise controlling shareholders’ incentives to monitor managers. The data examined show the SSSR strengthens incentives of state-owned enterprise controlling shareholders to replace fraudulent management. Our findings support the view that economic incentives are important to promote corporate governance and deter fraud.
|Journal||Journal of Business Ethics|
|Early online date||25 Nov 2014|
|Publication status||Published - Nov 2016|
- CEO turnover
- corporate fraud
- Split Share Structure Reform
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- Business School - Personal Chair in Corporate Finance
- Accounting and Finance
- Corporate Finance
Person: Academic: Research Active