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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 China.

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.

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.

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.

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.

Using a unique three‐digit firm‐level data set of all medium‐ and large‐sized manufacturing enterprises in Bulgaria covering the years 1997/1998, and investigation is conducted into how wage determination is related to ownership status. Building on a slightly modified version of the right‐to‐manage model, the pooled OLS, panel and first‐difference TSLS estimates show statistically significant differences in the share of rents taken by workers employed in state, private domestic and foreign firms. Taking account of firm heterogeneity, it is found that rent sharing is nearly non‐existent in foreign‐owned firms, while the level of pay is higher compared with state‐owned companies. Further, rent sharing seems to be highly pronounced in state‐owned enterprises, while on average domestically private‐owned companies are characterised by less rent sharing. Overall, the robustness checks confirm these findings.

This paper aims to investigate the impact of ownership concentration of the largest shareholder and foreign ownership on the demand for an external audit for small and medium-sized enterprises (SMEs) in six Latin American countries. In particular, the authors test whether foreign-owned firms (compared with domestic private-owned firms) and domestic firms with minority foreign shareholders are more likely engaged in audit assurance.

The authors applied the logit model to estimate the impact of ownership concentration and owner/shareholder type on audit demand, using a sample of 4,609 SMEs. The probabilities of being audited for firms in these countries are then calculated from the estimation results.

The empirical results suggest an inverse relationship between ownership concentration and audit demand only for Uruguay and Peru. However, foreign-owned firms and domestic private-owned firms with minority foreign ownership have a high probability of being audited for all sample countries.

Policymakers in developing countries may promote foreign investments in domestic private-owned firms to improve their corporate transparency and governance.

This study contributes to the growing literature on the impact of ownership on audit demand by particularly focusing on foreign owners and foreign minority shareholders. The findings indicate that foreign ownership (either majority or minority) contributes to corporate transparency and business environments in emerging countries.

Building on prior literature, this paper provides an empirical analysis of the impact of the Chinese institutional environment on its globalization patterns. A framework is presented through which distortive government policies act upon existing country and firm‐specific advantages, giving rise to institutional‐specific (dis)advantages. The applicability of this framework is then tested empirically through an unrestricted regression model that controls for the standard explanatory factors of inter‐country foreign direct investment (FDI) in comparing state and private sector outbound foreign direct investment (OFDI) determinants. This study concludes that institutional discrimination creates relative advantages for state‐owned firms at a cost to private enterprise, leading to divergences in IB strategies.

This study aims to discover how the patterns and effects of managerial ties differ among state‐owned, domestic private, and foreign firms.

Data were collected through in‐depth interviews with 15 top executives of economy hotel chains headquartered in five cities in China. The typical qualitative data analysis procedures, such as voice‐recording, transcribing, coding, and pattern‐matching, were strictly followed.

Results indicate that managers in firms of different ownership types use different network tie combinations and differ in the extent to which they can benefit from managerial ties. For example, entrepreneurs in state‐owned enterprises thought strong ties were more important than weak ties and political ties were more important than business ties, while those in domestic private firms and firms founded by Chinese using foreign funding benefited more from business ties.

The study contributes to both entrepreneurship and social network theories by summarizing different patterns of managerial ties and exploring the rationales for the variance. It also provides evidence for understanding the important roles played by executives' network ties in the entrepreneurial processes. Entrepreneurs in the Chinese hospitality industry may use the findings to direct organization resources to more productive managerial ties and manage their network ties efficiently in the dynamic environment of a transitional economy.

This paper aims to investigate the interconnections between corporate ownership, tax system and controlling shareholder tunneling through intercorporate loans in an emerging market setting.

China’s Enterprises Income Tax reform in 2008 abolished its previous multiple-tiers tax system under which foreign direct investment (FDI) firms enjoyed preferential tax rates than domestic firms by introducing a new unified-rate tax system. Using difference-in-differences tests, the author analyzes changes of controlling shareholders tunneling through intercorporate loans among Chinese listed companies around this reform.

The author documents significant reductions of intercorporate loans after the reform. More importantly, the author reveals that foreign-invested firms experienced larger reductions of intercorporate loans than domestic firms. The author also shows that state association matters for domestic firms’ response to the reform. In addition, the author documents positive stock market reaction to the tax reform announcement for firms that exhibited higher level of tunneling prior to the reform, indicating market expectation of reduced principal-principal conflict post-reform.

The findings suggest effective corporate governance system is warranted to constrain intercorporate fund transfers in emerging markets where tax incentives are used for attracting inward foreign direct investments. Institutional reforms in emerging markets aimed at removing market frictions can alleviate the problem of controlling shareholder expropriations of minority interests or tunneling.

This is a pioneering study that reveals the role of tax as a public governance mechanism in weak minority investor protection environment.

The purpose of this paper is to theoretically investigate the potential welfare effects of state-owned enterprises’ (SOEs) international operations.

The paper is conceptual, applying standard economics state ownership theory based on agency theory and incomplete contracts theory to different forms of SOE cross-border operations.

When private firms are risk averse or financially constrained, or when writing complete contracts and making credible commitments are not possible, state ownership can achieve objectives such as international operations supporting domestic industrial policy, addressing social objectives in another government’s territory and addressing transnational market failures. Welfare effects may, however, also depend on home-host country relationships.

This is the first application of standard economics state ownership theory to state-owned multinationals. The analysis shows that key conclusions from the state ownership literature in a domestic setting can be extended to international operations, and highlights new theoretical issues arising from SOEs going beyond their home jurisdiction to that of another government.

The purpose of this paper is to examine the impact of trade and investment liberalization on the wage skill premium between skilled and unskilled workers in Vietnam.

An analysis is undertaken by means of descriptive statistics and econometric investigation using a firm-level data set from the Enterprise Survey of Vietnam.

It is shown that there has been a positive wage differential between foreign-invested enterprises (FIEs) and domestic enterprises over the period 2000-2009. More importantly, the FIE-domestic wage differentials are found to be significantly positive after accounting for differences in capital intensity, size, firm location, and industry features. Furthermore, statistical evidence shows that these wage differentials narrowed over the period 2006-2009.

One of the first study examines the FIE-domestic wage differentials given the outward-oriented economic reforms since 2000 in Vietnam.

This research identifies the level of labor misallocation in Vietnamese manufacturing sector for the period 2005–2019. The paper also examines the effects of labor misallocation on productivity in Vietnamese manufacturing firms controlled by industry- and firm-level factors.

The level of labor misallocation and efficiency gains in total factor productivity (TFP) are assessed using Vietnam's annual enterprise survey data for the period 2005–2019 and Hsieh and Klenow (2009) productivity decomposition framework.

The results indicate four main points. Firstly, labor misallocation tends to increase from 2005 to 2019. Secondly, labor misallocation by firm ownership and technology level is found to be highest in state-owned enterprise and low-tech industries, whereas foreign direct investment and high-tech firms have lowest labor misallocation. Labor misallocation in small- and medium-sized enterprises is higher than in large-sized enterprises and is equivalent to overall sample. Thirdly, labor misallocation decreases productivity in manufacturing firms. The firm-level factors such as bigger technology gap, external capital, firm scale and poor liquidity ratio decrease productivity in manufacturing firms. Whereas firm-level factors such as Vietnam's accession to the WTO, reasonable corporate tax structure, capital intensity, human capital and firm age increase productivity of manufacturing firms. The industry-level factors such as FDI horizontal, forward and supply backward spillovers promote productivity from foreign firms to domestic ones. Meanwhile, only backward linkages reduce productivity of firms. Finally, by difference-in-differences (DID) method, the result indicates foreign firms have higher average labor productivity than domestic firms before or after Vietnam's accession to the WTO. After joining WTO, the average labor productivity of foreign firms is increased by 854 million VND while the average labor productivity of domestic firms is increased by 895 million VND. The DID between the two groups (domestic firms and foreign firms) before and after Vietnam's accession to WTO is 41 million dong.

The main limitation of the study is that the market is assumed perfectly competitive. The model focuses on selective factors affecting labor productivity.

The focus of many previous international research papers was generally to look at the level of labor misallocation in developed countries. However, knowledge about labor misallocation is limited, particularly in the context of developing countries. This paper examines the level of labor misallocation by region, ownership, level of technology and firm size on productivity and the effect of misallocation on productivity in Vietnamese manufacturing firms.

The peer-review history for this article is available at: https://publons.com/publon/10.1108/IJSE-09-2021-0552.

This study investigates the ability of crime management expenses, recognised external quality certification and ownership structure to describe the cross-sectional changes in the capital and labour efficiencies of manufacturing firms in middle income economies. It controls for the potential effects of graft incidence and firm age on firm-level efficiency.

The study adopts a state space model approach within the context of cross-sectional regressions. Data for the study are obtained from the World Bank Enterprise Survey for 2006, 2009, 2013, 2016 and 2019.

The study provides evidence that crime management expenses impact labour efficiency negatively. Also, its effect on capital efficiency is positive in 2019 and negative in 2013 and 2016 eras. Additionally, external auditor services and internationally recognised quality certification increase labour and capital efficiencies. Graft incidence exerts negative and positive effect on capital efficiency in the recent and earlier periods respectively. In addition, older firms tend to have higher labour efficiency, whilst younger firms have higher capital efficiency. There is evidence of firm size and export orientation effects in the drivers of efficiency.

Policies aimed at creating graft and crime-free business environment will enhance the efficiency and growth of firms' particularly for small firms. Also, the market rewards recognised quality assurance and good reputation.