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1 – 10 of over 16000The purpose of this paper is to develop initial conceptualizations on two types of Chinese multinational corporations (MNCs), that is, state‐ and privated‐owned MNCs, in terms of…
Abstract
Purpose
The purpose of this paper is to develop initial conceptualizations on two types of Chinese multinational corporations (MNCs), that is, state‐ and privated‐owned MNCs, in terms of internationalization motivation, entry strategy, and managerial capabilities.
Design/methodology/approach
This is a conceptual paper. Existing case studies are cited as illustrations.
Findings
Compared to Chinese private MNCs, state MNCs are more likely to be driven by internationalization motives that are not based on economic rationality, to adopt an integrated entry strategy, but less likely to contain dynamic capabilities necessary for competing internationally. In the short run, Chinese private MNCs should outperform their state counterparts, which however does not necessarily translate into better survival rate.
Research limitations/implications
The conceptualizations advanced in this paper should be tested empirically in future studies.
Practical implications
Given the differences between state and private Chinese MNCs, it would be a mistake for Western governments and the private sector to treat all Chinese MNCs as equals. Particularly, the concern about the private Chinese firms should place more emphasis on their capabilities to compete and collaborate as autonomous economic entities.
Originality/value
While much research attention has been given to “Chinese MNCs,” the author makes a distinction between state versus private MNCs from China and compares the two types with regards to internationalization motives, entry strategy, managerial capabilities, and performance potentials.
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This study investigates, from a resource dependence perspective, the effects of domestic private firms' political connections and economic power on their labor law compliance in…
Abstract
Purpose
This study investigates, from a resource dependence perspective, the effects of domestic private firms' political connections and economic power on their labor law compliance in China.
Design/methodology/approach
This study used data from a large-scale nationwide survey on Chinese domestic private firms, the Chinese Private Enterprise Survey collected from 2004 to 2012, to examine factors of interest that affect firms' compliance to labor laws. Hypotheses were tested using OLS regression models with robust standard errors.
Findings
The results indicate that domestic private firms' institutional political connections specified by the presence of a union or a Chinese Communist Party committee is positively related to firms' labor law compliance, and firm owners' formal political connections indicated by their membership in the People's Congress or the Chinese People's Political Consultative Conference have a somewhat negative effect. The post-hoc analysis shows that firm owners' political representation at the county and city levels is negatively related with labor law compliance, while the political representation at the national level is positively related to labor law compliance. Moreover, the economic power of a domestic private firm is related positively to its labor law compliance. Finally, although the authors did not find evidence that the 2008 Labor Contract Law increased labor contract coverage, it did increase pension coverage after 2008.
Research limitations/implications
The present study reveals a more refined relationship between domestic private firm owners’ political connections and the degree of labor law compliance. It also demonstrates that the economic power of domestic private firms has a positive effect on their labor law compliance. This implies the importance of the contribution of domestic private firms to economic and social development in China, warranting continued support of the development of the private sector in China.
Originality/value
This study adds to the sparse literature on the determinants of domestic private firms' labor law compliance in China. It also sheds light on whether political connections and the rising economic power of Chinese domestic private firms influence their compliance with labor laws.
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The purpose of this paper is to investigate whether and how affiliation with the government-controlled business association, namely, China Federation of Industry and Commerce…
Abstract
Purpose
The purpose of this paper is to investigate whether and how affiliation with the government-controlled business association, namely, China Federation of Industry and Commerce (CFIC), affects corporate philanthropy in an emerging market.
Design/methodology/approach
Through an analysis of survey data gathered from Chinese private firms, this paper conducts multiple regressions to examine the impact of the CFIC membership on corporate philanthropy.
Findings
Empirical results show that the CFIC membership of private entrepreneurs is significantly positively associated with corporate philanthropy. Moreover, this study finds that the provincial marketization level and the firm Communist Party branch attenuate the positive association between CFIC membership and corporate philanthropy, indicating that the effect of CFIC on corporate philanthropy is more pronounced in regions with lower marketization level and firms without Communist Party branch. The findings are robust to various alternate measures of corporate philanthropy and remain valid after controlling for potential endogeneity.
Practical implications
Firms will be more active in corporate philanthropy to respond to the government’s governance appeal when they join the CFIC. This highlights the implications of political connections and in particular on the value of government-controlled business associations in the Chinese business world.
Originality/value
This study extends the literature on the determinants of corporate philanthropy and deepens the theoretical understanding of the governance role of business association with Chinese characteristics.
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Ting Ren and Zheng Wang
This paper proposes an examination of the relationship between female participation in top management teams and firm performance in the emerging Chinese private economy. It aims…
Abstract
Purpose
This paper proposes an examination of the relationship between female participation in top management teams and firm performance in the emerging Chinese private economy. It aims to examine the direct link between female participation in top management teams and firm performance. This is examined in the context of human capital and social capital associated with female top executives to investigate the origins and the contingencies of the linkage.
Design/methodology/approach
Drawing on resource dependence theory, the study develops and tests a set of hypotheses regarding the key relationships, using the data of listed private‐owned companies in China's security exchanges in 2008, with critical information on financial performance, corporate governance structure and the top management team composition of the companies. Regression analyses are conducted to test the direct relationship and the moderating effects.
Findings
The empirical analysis supports a positive relationship between the degree of female participation and firm performance in Chinese privately owned companies. The positive relationship is further strengthened by female top executives' human capital and social capital, consistent with the hypotheses.
Research limitations/implications
The present study gains consistent results with research conducted in the Western context, suggesting that the top management behavior of Chinese private enterprises is similar to that of their Western counterparts, possibly due to the fact that they are less influenced by direct governmental control and are more profit‐driven than state‐owned companies.
Practical implications
The results of the study suggest that Chinese private companies can gain competitive advantages through identifying, attracting, and developing female managerial talents. And the female executives in the new era should be ones with systematic education and strong social connections. Both factors facilitate female executives to contribute better to their companies' performance.
Originality/value
The contribution of the present study is twofold. First, drawing on extant literature in the Western business context, the present study is the first to examine how female participation in top management influences firm performance in the context of the Chinese private sector, which contributes to the understanding of and offers insights to Chinese managerial practices. Second, the study enriches the extant literature by examining the moderating effects of female executives' human and social capitals.
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The purpose of this paper is to analyse the key elements in the strategy of leading Chinese private firms in order to identify the key factors that are associated with the success…
Abstract
Purpose
The purpose of this paper is to analyse the key elements in the strategy of leading Chinese private firms in order to identify the key factors that are associated with the success of these firms.
Design/methodology/approach
Secondary data source from the self report of 30 of the top 50 private enterprises of 2004 in China as the basis for analysis. In analysing these self reports, a table was compiled that records the name of each case study firm, nature of its businesses, its ranking in the top 50 in 2004, background of the owner entrepreneur/CEO, history of the firm, and key elements of strategies.
Findings
The paper identifies that the key success factors of these firms appear to be associated with firm growth through business diversification, development of international market, strong emphasis on product innovation and quality enhancement, strategic marketing, product and corporate branding, and importantly, entrepreneurship of owner managers/CEOs and reform of corporate governance. Also revealed that top‐performing Chinese private firms tend to adopt a high‐commitment model of human resource management which emphasizes training and development, promotion by competence, extensive employee welfare provision, and enterprise culture development and management.
Research limitations/implications
The secondary data came from company self reports with potential bias of self reporting. They were snap shots and anecdotal instead of longitudinal studies. They also contained top management's views only, which are not necessarily representative of the wider organisation. These methodological drawbacks mean that the data needs to be treated with caution and that more in‐depth empirical research is needed to shed more light on the subject that is of growing importance in understanding Chinese business and management.
Originality/value
This paper fills the gap in existing literature by revealing changes that have taken place in the privately owned businesses in China, key challenges they face and what strategic response they have adopted. The understanding of the business and management strategies of these firms is beneficial not only to scholars and students who are interested in China but also to organisational managers who wish to develop businesses with China.
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Abstract
Purpose
This study aims to investigate the role of network in affecting private firms’ internationalization decision. Specifically, it investigates the way that business ties, political ties and status influence an internationalization decision.
Design/methodology/approach
On the basis of the survey data collected from Chinese private firms, this study distinguishes business ties from political ties and introduces network status. Binary logistic regression is used to test the hypotheses.
Findings
Results show that private firms that have business ties are more likely to internationalize, whereas private firms that have political ties are less likely to internationalize. High-status private firms are more likely to internationalize. Political ties negatively moderate the relationship between business ties and internationalization. High-status firms with political ties are more likely to internationalize.
Originality/value
This study provides theoretical and practical contributions. Results complement previous research on social networks in the context of Chinese private firms and have implications for managers who exert effort to internationalize their firms.
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Fabian Hänle, Stefanie Weil and Bart Cambré
This paper aims to use the institutional perspective to jointly explore the underlying motives that drive Chinese private small- and medium-sized enterprises (SMEs) to invest in…
Abstract
Purpose
This paper aims to use the institutional perspective to jointly explore the underlying motives that drive Chinese private small- and medium-sized enterprises (SMEs) to invest in the developed economy of Germany and the role China’s institutional environment is playing in this context.
Design/methodology/approach
Given the lack of recent in-depth studies, the authors use multiple case study method to present rich insights from elite interviews with executives belonging to seven Chinese SMEs and industry experts, as well as the study of firm documents, social media and the latest governmental policies.
Findings
The results indicate not only market-, resource- and strategic asset-seeking motives, but contrary to the literature, also efficiency-seeking goals. Further driving factors are the integration in global value chains and high degrees of entrepreneurial orientation. The second major finding is that China’s institutional environment induces widely divergent effects. Its ministries established new outward foreign direct investments (OFDI) support measures that are beneficial for some SMEs’ post-entry operations. However, some firms are not aware of any support measures or suffer from discrimination that hinders innovation and from which they try to escape by investing abroad.
Originality/value
This paper considers different levels of analysis (firm, entrepreneur, institutional environment) to investigate Chinese SMEs’ motives in Europe’s largest market. By examining why and how these firms use OFDI to a developed economy, the authors address an essential question for China’s economy that is of primary political and academic concern (“How can China get that improved innovation that often seeds entrepreneurial growth?”). In addition, the study contributes to the growing discussion of institutional escapism in emerging markets by revealing five institutional hardships Chinese SMEs are facing and how this relates to their internationalization.
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Wenge Zhang, Jun Li and Yiyuan Mai
The purpose of this paper is to examine the relationship between industry association membership and firm innovation in Chinese private ventures. A secondary objective is to…
Abstract
Purpose
The purpose of this paper is to examine the relationship between industry association membership and firm innovation in Chinese private ventures. A secondary objective is to investigate potential moderating effects of firm learning practices and founder characteristics on the above relationship, and to draw out implications for policymakers and practitioners.
Design/methodology/approach
The paper utilizes data from a sample of 567 Chinese entrepreneurial firms operating in 9 designated emerging industries. Hierarchical regression models were employed to analyze the effect of industry association membership on firm innovation, and the potential moderating effects. A 2SLS procedure was adopted to control for potential endogeneity issue. Supplemental analyses were conducted to ensure the robustness of the findings.
Findings
The paper provides empirical insights about how industry association membership, along with firm learning practice and founder leadership, affect firm innovation in Chinese private ventures in emerging industries. It suggests that industry association membership positively affects firm innovation. Further, there is a three-way interaction effect of industry association membership, learning practice and founder power on innovation.
Research limitations/implications
Due to the design of the data set, there are some limitations. First, the study only considered whether a firm belongs to an industry association, but not the nature of such membership (length, firm status in the association, etc.). Second, the cross-sectional design may limit the power of the study to make casual implications about the tested relationships.
Practical implications
The paper provides important practical implications for policymakers and entrepreneurs in China. In general, the results suggest that private ventures pursuing innovation in emerging industries can benefit from industry associations, and entrepreneurs shall actively engage in firm-level and personal-level learning. For policymakers, the study suggests that to foster innovation in an emerging industry, special attention shall be paid to building necessary institutional support to develop and to strengthen the role of industry association in the industry.
Originality/value
This paper fulfills an important gap in the literature in that it is one of the first, which investigates the role of the industry association in firm innovation, especially in a non-western context. This paper provides new insights into the role of industry association and firm innovation in an under-researched developing economy context.
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The purpose of this paper is to investigate the influence of religious entrepreneurs on bank loans and further examine the moderating effect of entrepreneurial gender.
Abstract
Purpose
The purpose of this paper is to investigate the influence of religious entrepreneurs on bank loans and further examine the moderating effect of entrepreneurial gender.
Design/methodology/approach
In 2010, the Chinese national survey reported the different religious beliefs of private entrepreneurs. Using this set of survey data, the authors obtain a sample of 4,330 Chinese family firms and employ the Tobit regression approach to examine the relationship between the amount of bank loans and the religious background of entrepreneurs. In addition, the authors use the propensity score matching approach to address the endogeneity issue.
Findings
Based on the data from the 2010 national survey, the authors document that the amount of bank loans is significantly higher for Chinese family firms with religious entrepreneurs than for their counterparts. This finding suggests that religious individuals are inclined to be more ethical and honest and Chinese family firms with religious entrepreneurs transfer soft information to banks, and eventually lenders favor religious entrepreneurs with more bank loans. Moreover, the authors reveal that the amount of bank loans is significantly larger for firms with female entrepreneurs than for those without female entrepreneurs. In addition, entrepreneurial gender attenuates the positive relationship between religious entrepreneurs and bank loans.
Originality/value
This study is one of few studies to examine the influence of an entrepreneur’s religious belief on bank credit decisions and adds to previous studies about religious influence on corporate behavior by revealing a positive association between religious entrepreneurs and bank loans. Moreover, this study validates that female entrepreneurs exert positive effects on the amount of bank loans and attenuate the positive influence of religious entrepreneurs on bank loans.
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Wei Sheng, Zhiyong Niu and Xiaoyan Zhou
The purpose of this paper is to explore the determinants of entrepreneurs’ subjective social status perception (SSP) on firm international behaviors based on the upper echelons…
Abstract
Purpose
The purpose of this paper is to explore the determinants of entrepreneurs’ subjective social status perception (SSP) on firm international behaviors based on the upper echelons theory and social class theory.
Design/methodology/approach
To test the hypotheses, the authors studied a large sample of 10,823 small- and medium-sized private Chinese enterprises from 2006 to 2014.
Findings
The results showed that entrepreneurs with higher status perception prefer international activity and firms have higher export intensity and intention. In addition, the social capital of entrepreneurs and institutional environment amplifies the positive relationship between SSP and international behavior.
Originality/value
This paper contributes to research on the upper echelon of management and extends our understanding of how managerial social characteristics influence international strategic decision-making. Besides, it also contributes to the emerging stream of social status research in international expansion studies and expand researchers’ limited understanding of the effects of social status in business settings.
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