Opportunities for financial reporting fraud arise because of information asymmetries—often labeled “lack of transparency”—between top managers and their diverse shareholders. We evaluate the relative contributions of information asymmetries arising from industry-level and firm-level complexities to the likelihood of top managers committing financial reporting fraud. Using a sample of 453 matched pairs of firms that have and have not been identified as having committed financial reporting fraud, we found that information asymmetries arising from industry- and firm-level complexities increase the likelihood of financial fraud. Moreover, more CEO stock options increase the likelihood of fraud when industry complexity is high, while aggressive monitoring by the audit committee reduces the likelihood of reporting fraud when firm-level complexity is high.

基于科学的企业承担着基础科学成果的商业化使命，同时做一些补充性研究，成了推动经济社会发展的现实动力。如何构建基于科学的企业的内部治理机制成为该类企业培育创新能力的关键。本文运用案例研究方法系统探讨了基于科学的企业内部治理机制的形成逻辑、治理功能构建以及治理边界拓展等问题，讨论了内部外因素的耦合机制，提炼了该类企业内部治理机制的理论模型。研究发现，基于科学的企业治理机制的形成和发展的“主导”逻辑是“注重原始创新，突破核心技术”。在创新研发人才梯队配置上，以“科学背景”领导团队为核心，以创新研发团队为支撑；在人员激励上，采取具有保障效应的“短期薪酬激励”和具有绑定效应的“股权长期激励”；在股权安排上，采取“长期导向战略投资者”和“科学家控股”的混合股权模式。其治理边界模糊化，“高校+科技园+政府+客户”等多元素治理主体拓展了该类企业的治理边界，发挥内外部治理机制协调互动的耦合效应。本文丰富和拓展了基于科学的企业内部治理的研究框架，对构建中国情境下基于科学的企业内部治理理论与管理实践提供参考价值。

In the field of science-based innovation, science-based enterprises bear the mission of commercializing fundamental scientific achievements while concurrently engaging in supplementary research, becoming a tangible driving force for advancing economic and social development. Constructing internal governance mechanisms for science-based enterprises has become a key factor in nurturing innovation capabilities. This paper employs a case study method to systematically explore issues such as the formation logic of internal governance mechanisms, the construction of governance functions, and the expansion of governance boundaries. The discussion encompasses the coupling mechanisms of internal and external factors, leading to the extraction of a theoretical model for internal governance mechanisms of such enterprises. In terms of sample selection, adhering to the principles of representativeness and theoretical sampling, this paper chooses firms listed on Sci-Tech innovation board (STAR Market) that are engaged in the “scientific research and technical services” industry. Subsequently, it further selects biopharmaceutical firms involved in research and experimental development. Through a review of corporate materials, five firms are identified that are engaged in the transformation of basic scientific achievements while concurrently conducting supplementary scientific research. This paper encodes case data in three steps, forming a data structure consisting of first-order constructs, second-order themes, and theoretical categories. Based on this data structure, the paper proposes propositions, discusses the operation of science-based corporate internal governance mechanisms, and ultimately presents a model of coupling mechanisms in internal governance. The study reveals that the dominant logic in the formation and development of governance mechanisms for scientific-based enterprises is centered around “emphasizing original innovation and breakthroughs in core technologies”. In terms of configuring the talent pool for innovative research and development, the core leadership team is centered around individuals with a “scientific background”, supported by an innovative research and development team. Regarding personnel incentive mechanisms, a combination of “short-term compensation incentives” ensuring market competitiveness and “long-term equity incentives” with binding effects is adopted. In the equity arrangement mechanism, a hybrid equity model involving “long-term oriented strategic investors” and “scientists holding significant control rights” is implemented. Furthermore, the governance boundaries are blurred, with diverse governance entities such as “universities, science parks, government, and customers” expanding the governance boundaries of these enterprises, leveraging the coupling effects of internal and external governance mechanisms. The main theoretical contributions of this paper are as follows. Firstly, the paper elucidates the “dominant logic” of science-based corporate governance mechanisms, contributing to an understanding of the cognitive foundation and behavioral logic in the formation process of these governance mechanisms. This fills a gap in previous literature, which only focused on the external behavioral manifestations of such corporate governance mechanisms. Secondly, the paper goes beyond the analysis of the impact of team heterogeneity on firm performance and systematically explores, from a governance function perspective (personnel team configuration mechanisms, incentive mechanisms, and equity allocation mechanisms), how to build a talent pipeline for innovative R&D, how to motivate employees, and how to establish a long-term oriented equity structure. Taking a systemic approach emphasizes the coupling mechanism between personnel configuration, personnel incentive, and equity allocation, highlighting their impact on the innovation governance logic of such enterprises. Thirdly, from a resource dependence perspective, the paper discusses how science-based enterprises can incorporate external governance elements into internal governance functions, fully leveraging the coupling mechanism of internal and external factors on innovation goals. To sum up, this paper enriches and expands the research framework for internal governance of science-based enterprises, providing valuable reference for the construction of theoretical models and management practices for internal governance under the Chinese context.

Recent research has shown that managers in publicly traded companies facing earnings pressure—the pressure to meet or beat securities analysts’ earnings forecasts—may make business decisions to improve short-term earnings. Analysts’ forward-looking performance forecasts can serve as powerful motivation for managers, but may also encourage them to undertake short-term actions detrimental to future competitiveness and performance. To identify whether managerial reactions to earnings pressure suggest evidence of intertemporal trade-offs, we explored how companies respond to earnings pressure under different conditions of corporate governance that shape the temporal orientations of managers. Using data on competitive decisions made by U.S. airlines under quarterly earnings pressure, we examined the effect of earnings pressure on competitive behavior under different ownership structures (ownership by long-term dedicated investors versus transient investors) and CEO incentives (unvested incentives that are restricted or unexercisable in the short term, versus vested incentives). The results suggest that companies with more long-term-oriented investors and long-term-aligned CEOs with unvested incentives are less likely to soften competitive behavior in response to earnings pressure, relative to companies with transient investors and CEOs with vested, immediately exercisable stock-based incentives. Using a difference-in-differences (DiD) specification for stronger identification, we also found that firms respond to their rivals’ earnings pressure shocks by increasing capacity and prices, particularly when those rivals do not have long-term-oriented investors and CEO incentives. The evidence is more aligned with the view that the pursuit of short-term earnings as a result of earnings pressure may be detrimental to long-term competitiveness.

This study develops and operationalizes a behavioral forward-looking search model by incorporating prospect theory, organizational risk literature, and the logic of the behavioral theory of the firm. With recognition of the bounded rationality of decision makers and the goal-directed, rule-based nature of organizations, this model suggests that a comparison between firms' performance expectation and performance target translates the cognitive representation of the firms' future into their subsequent actions. By examining the research and development (R&D) expenditures of U.S. manufacturing firms from 1980 to 2001, this study explores how performance, aspirations, expectations, and slack affect decision making about firms' R&D search investments. The findings show that both performance feedback and performance prospect are important determinants of firms' search behavior after controlling for firm, industry, and time effects. In addition, backward- and forward-looking determinants have interactive effects on search behavior. Firms' problem-driven search activity further increases when firms feel unlikely to achieve the performance target for another year. In contrast, search intensity is reduced when firms expect to improve their performance from an underperforming situation to an outperforming situation. The findings suggest that future research on performance feedback and experiential learning should also consider the effect of forward-looking prospects on firm behavior.