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The purpose of this paper is to examine whether corporate ownership affects corporate capital structure. This study also seeks to find out whether there is difference in dynamics of the capital structure between these two groups of firms.

Based on panel data of China's listed firms from 1998 to 2007, this paper employs a static empirical model to validate the difference in capital structure between these two groups of firms, and then, a dynamic empirical model is used to explore the dynamic adjustment of the capital structure.

The empirical results show that there is structural difference in static capital structure between state-owned and private listed firms. Further study results tell us that the adjustment to an optimal capital structure is to be faster for the private firm than for the state-owned firm.

The findings suggest that compared with state-owned firms, private firms face higher financial friction in financing activities, but have more incentive to adjust toward optimal capital structure to maximize the shareholders' benefit. This study offers insights to corporate managers interested in privatization, when a state-owned firm is privatized, that firm becomes subject to the disciplining forces of the market and more active to pursue maximum market value of the firm, thus the adjustment to an optimal capital structure to be faster for private firm than for state-owned firm.

This paper for the first time looks at the influence of ownership on capital structure, from both static and dynamic perspective. And this study is helpful for regulators, and corporate managers to understand the corporate financial management behavior.

This paper aims to study how state ownership influences the innovation process in terms of allocating resources toward searching for new solutions and converting these efforts into economic value. On one hand, deep pockets of the state provide slack resources that may facilitate risk taking and innovation. On the other hand, soft budgets can create incentive problems and dampen the efficient use of resources. The authors suggest how accounting for competitive context can disentangle these countervailing forces.

The authors use a panel of over 240,000 Chinese firms over the years 2004–2008. The broad sample and period afforded substantial variability in terms of state ownership within and across firms. The authors use a two-stage model and a within-firm (i.e. fixed-effects) design, controlling for all time-invariant firm characteristics and the problematic unobserved heterogeneity that can often lead to erroneous inferences. Furthermore, the relatively short window limits the likelihood of time-varying unobserved firm characteristics biasing the empirical results.

The authors found that private-sector competition has the opposite effect on the relationship between state ownership and the second step of the innovation process. In industries where there is robust private-sector competition, state ownership diminishes the firm’s ability to convert R&D efforts into economic value. Private-sector competition competes away any advantages state-owned firms may have in terms of developing or accessing the complementary resources needed for commercialization. Ultimately, the inefficiencies of state ownership in terms of relatively undisciplined selection and monitoring of R&D activities outweigh any potential resource advantages derived from state ownership.

The state remains a prominent player in many economies throughout the world. The authors explored how state ownership of firms influences the resources they expend in searching out new solutions, and their success in converting such resources into economically valuable new products and services. State ownership has potentially countervailing effects on innovation. The authors disentangle these countervailing effects through consideration of how accounting for competitive context could determine whether the beneficial effects of state ownership dominate its detrimental effects for both searching for new solutions and converting these efforts into economically valuable new products. With a focus of market competition as an external force that drives the difference in innovation between SOEs and the private-sector, this study serves as a parallel effort to Jia et al. (2019) who investigate the joint effect of public and corporate governance on SOEs’ innovation performance, and Zhou et al. (2017) who concern the balance of the institution and efficiency logics on the comparative advantage of SOEs over privately owned enterprises in innovation performance.

State-owned firms play important roles in Chinese cross-border acquisition (CBA) activities. However, compared with private firms, state-owned firms have a lower likelihood of acquisition completion and take longer to complete a deal. This paper aims to determine why this phenomenon exists and how state-owned firms can overcome the constraints of their identity.

By integrating organizational learning theory with institutional theory, this paper attempts to answer the research questions from a legitimacy perspective. Employing Chinese CBA data from 1982 to 2014, the authors use a logit model and a random effects model to test the hypothesis.

The results show that a state-owned identity easily causes legitimacy concerns among host country regulatory agencies; thus, it may result in longer and more uncertain evaluation behaviors, which lead to a lower likelihood of CBA completion and a longer deal duration. Only experience with failed acquisitions can increase CBA completion probability. Furthermore, in very complex decision-making environments, such as that surrounding deal duration, only specific types of experience (i.e. experience of failed international acquisitions) can trigger learning behavior, whereas general experience (i.e. failed acquisition experience) has little influence. Favorable bilateral relationships may not improve the completion rate and efficiency of state-owned firms, but high-quality host country institutions lead to a higher likelihood of CBA completion among state-owned firms; however, this may be not conducive to decreasing the time needed to complete an acquisition deal.

First, by discussing the completion rate and duration of CBAs conducted by state-owned firms and analyzing the factors that influence them, this paper enriches and develops the theory of organizational overseas mergers and acquisitions (M&As). Second, by adopting a legitimacy perspective and integrating institutional theory, the authors theorize how state-owned status influences firms’ M&A completion rate and time and test the hypotheses empirically; thus, this paper improves and deepens institutional theory. Third, by discussing how different types of experience (i.e. successful experience vs failed acquisition experience) influence the acquisition completion rate and duration and how general experience and specific types of experience affect these two dependent variables differently, this paper explains how state-owned firms can learn effectively from experience, contributing to organizational learning theory.

This paper aims to investigate the Chinese employment relationship under the framework of psychological contracts. The authors explored the effects of firm ownership (in terms of state-owned and private enterprises) and employment type (in terms of permanent and temporary employees) on employee perceptions of psychological contract. In addition, the associations between fulfilled psychological contract and various dimensions of employee attitudes were examined.

The authors adopted a questionnaire as the primary instrument to investigate the impact of firm ownership and employment type on psychological contract perceptions and outcomes. The analysis was based on a Chinese sample of a size of 363 employees.

The results indicate that state-owned employees overall reported fewer promises (employer under-obligation promised psychological contract), while private employees tended to have more promises (mutual high obligation, employer over-obligation and quasi-spot obligation promise-based psychological contract). Permanent employees reported high fulfillment (employer over-obligation, mutual high obligation and employer under-obligation fulfilled psychological contract). In contrast, temporary employees presented many promises (mutual high obligation promised psychological contract) and low fulfillment (quasi-spot fulfilled psychological contract). In general, firm ownership had weak effects on permanent and temporary employees’ perceptions of promise-based psychological contract, but no significant influence on fulfillment-based psychological contract. Moreover, psychological contract fulfillment was positively related to employees’ fairness perception and job satisfaction, while negatively related to the intention to quit. The authors failed to find comprehensive statistical support for the moderating effects of firm ownership or employment type.

The study contributes to the literature through a number of ways. First, instead of psychological contract breach, the authors use psychological contract fulfillment as a direct measure to examine the relationship between psychological contract and employees’ attitudes. Second, they investigate the effects of firm ownership on employment relationship under the psychological contract framework, enriching the institutional lens of the issue. Third, while majority of psychological contract studies concerning employment type concentrate on either permanent or temporary employees, the authors take both types into account. Fourth, they integrate perspectives of firm ownership and employment type. Finally, the authors perform the study in the Chinese context, which offers extra evidence to the body of psychological contract literature.

This policy paper compares the performance of state-owned enterprise (SOEs) versus private firms in selected emerging economies in Asia, focusing on a number of performance indicators. The indicators are internationally recognized quality innovation, product and/or service innovation, financing of operations, dealing with government regulations and labor performance. To the best of the authors’ knowledge, there has been no such comparative study for these indicators between SOEs and private firms and across countries. Most studies of SOEs have been national case studies. As such, they give us little knowledge of how a country compares with other countries at similar stages of economic development. A cross-country comparative analysis can help us identify broader trends and patterns.

The authors compare and discuss the performance of SOEs versus private firms in a number of emerging Asian countries, namely China, India, Indonesia, Malaysia and Vietnam. To do so, the authors use data from the 2018 World Bank Enterprise Survey (which is the latest available) for the period 2012–2015. The authors focus on a number of key performance indicators, namely internationally recognized quality innovation, product and/or service innovation, financing of operations, dealing with government regulations and labor performance.

The comparative analysis uncovers some interesting differences between the two types of firms. For example, somewhat surprisingly, SOEs tend to innovate more than private firms. However, the single most significant pattern the authors find is that in middle-income Asia both types of firms face formidable challenges with respect to doing business – e.g. scarcity of relevant training programs for employees. Therefore, the priority of policymakers must be to improve the overall business environment for all firms, regardless of their ownership structure.

The nature of this paper is a policy paper. This is because the data used in this study is survey data, conducted every four–five years (or more) for each country in the study and available for very few countries. As the data are not available for a continuous period of time, The authors could not conduct empirical research for this topic and thus made it a policy paper that presents a comparison across Asian countries as case studies.

The five selected Asian countries are interesting case studies for a comparative analysis since they are middle-income countries where SOEs play a significant role in the economy. Furthermore, state ownership is an important institutional dimension in emerging markets, and strong ties with the government can influence the performance of SOEs through various market and non-market channels. Despite the potential importance of the research theme, there is very little existing research on cross-country comparisons of the performance of SOEs vis-à-vis private firms. This could be explained by scarce data availability. With this in mind, the study attempts to shed some light on SOEs' performance and add to the rather limited literature.

In the context of China’s efforts to build world-class enterprises through mixed-ownership reform, this study aims to build an agency theory framework to analyze the differential relation between ownership structure and firm performance in majority versus minority state-owned enterprises (SOEs). It also evaluates the differential influence that political connectedness has on firm performance in the two types of SOEs.

Using a panel data set of Chinese state-controlled mixed-ownership enterprises covering the period 2010–2019, this paper uses ordinary least squares, random-effects, fixed-effects and three stage least squares regression analysis to study the differential impact of ownership structure and political connectedness on firm performance in majority versus minority SOEs.

In minority SOEs, firm performance is positively related to the ownership share of the largest private shareholder and state ownership positively moderates this relation. Furthermore, minority SOEs with a politically connected chairman perform worse than those with a politically connected chairman. In majority SOEs, there is no relation between the ownership share of the largest private shareholder and firm performance. In addition, majority SOEs with a politically connected chairman perform similar to those without a politically connected chairman.

The theoretical framework demonstrates that agency problems are substantially different in minority versus majority SOEs and that this influences how changes in ownership structure and in the type of chairman that is assigned affect firm performance. The empirical analysis confirms these predictions.

This paper looks at state-owned enterprises (SOEs) from the angle of the market for corporate control and analyzes in detail the reported rationales of a sample of 355 mergers and acquisition (M&A) deals performed by SOEs as acquirers over the period 2002-2012. The purpose of this paper, after having created a taxonomy of deal motivations, is to empirically test two alternative hypotheses: deviation vs convergence of M&A deal rationales between state-owned and private enterprises.

The data set is obtained by combining firm-level information from two sources, Zephyr and Orbis (Bureau Van Dijk). A recursive algorithm is developed to infer the ownership nature of the enterprises at the time the deal took place and then the authors double-checked the identity of the global ultimate owner by visual inspection of all the available information. Motivations are analyzed through a case-by-case analysis and classified into several categories, thereby providing a taxonomy of rationales behind SOE M&As and discussing their differences and similarities relative to private firms.

More than 60 percent of the deals performed by SOEs as acquirers are driven by “shareholder value maximization” motives, similarly to private enterprise acquirers. The other 40 percent of deals are almost equally spread among three rationales that specifically relate to the role of modern state capitalism in the economy. “Financial distress” motivation, which is the only one clearly deviating from the objectives of profit maximization typical of private ownership, is far less important than the others.

The paper does not analyze the case studies in detail. Neither does it correlate the evidence with the quality of corporate governance or the quality of institutions in the country. This would be interesting in order to discover whether the alignment of objectives between public and private enterprises is enhanced by certain features of public sector management, as suggested by the OECD (2015) Guidelines.

The paper suggests some policy implications in terms of reforms of the corporate governance of the SOEs and accountability of their management against clearly stated public missions. It also calls for the need for citizens to be informed in a transparent way about the rationales of major M&A deals when a SOE is on the acquirer side, and the consistency of such rationales with the mission assigned by governments to the enterprises they own. Finally, it underlines that regulatory concerns raised in many countries by the rise of cross-border SOE M&As are in most of the cases unfounded.

Existing literature has mainly focused on private corporate M&A deals or has just disregarded the ownership status of the acquiring firm. This paper focuses on the motivations for SOE deals in order to elaborate a taxonomy of SOE deal rationales and to identify the differences and similarities between private corporate firms.

The goal of this paper is to investigate the relationship between government control and firm value in China.

Government might extract social or political benefits from a state-controlled firm, thus decreases firm value. However, government’s monitoring on firm management reduces managers’ agency problem, which increases firm value. We first build a game-theoretic model to prove the existence of optimal government control given these two roles of government, and we then employ the OLS regression method to test the theory predictions using the length of intermediate ownership chains connecting the listed state-owned enterprises to their ultimate controllers as the measure of government control.

We find that firm values first increase then decrease as government control weakens. Moreover, we find that government usually retains a stronger control over state-owned enterprises than the optimal level. In addition, we show that government control can be further weakened in firms with good corporate governance mechanisms, which serve as a substitution of government monitoring.

Our results demonstrate that government control in China is still a necessary but costly mechanism to mitigate agency costs, especially when corporate governance system is underdeveloped.

We identify the substitution effect between government control and corporate governance using a unique measure of government control.

The purpose of this paper is to measure TFP growth and job reallocation in the Vietnamese manufacturing industry after the Doimoi period.

The study uses firm-level panel data from Vietnam’s annual enterprise survey data for 2000–2016 period in the Vietnamese manufacturing industry using Olley–Pakes static and dynamic productivity decomposition methods.

The aggregate productivity estimated from the WRDG method increased 2.323 percent, of which over 40 percent is due to the reallocation toward more productive firms. Olley–Pakes dynamic decomposition according to ownership, scale and industry shows that the contribution of private and state-owned firms and the contribution of small and medium firms and large firms to the TFP growth are 133, −33 percent, 58.56 and 41.44 percent, respectively. The within-firm productivity and net entry components are the main reasons for TFP growth rather than reallocation. The results show that the composition of the aggregate TFPs, estimated from WRDG, OP, LP and ACF, is correlated very high (over 80 percent) except for net entry components.

The major limitation of this study is that the authors compute an aggregate productivity index using actual employment-based shares (still misallocation in labor), rather than optimal employment-based shares (no misallocation in labor).

Job reallocation between industries is attracting attention in developing countries, especially transition economies. However, knowledge about job reallocation among industries is limited. This paper assesses the level of job reallocation among private and state-owned firms, small and medium firms and large firms in Vietnam.

This study examines the impact of China’s mixed-ownership reform on the innovation of non-state-owned acquirers, with a particular focus on the impact on firms with high financing constraints, low-quality accounting information or less tangible assets.

We use a proprietary dataset of firms listed on the Shanghai and Shenzhen Stock Exchanges to investigate the impact of mixed ownership reform on non-state-owned enterprise (non-SOE) innovation. We employ regression analysis to examine the association between mixed ownership reform and firm innovation.

The study finds that non-state-owned firms can improve innovation by acquiring equity in state-owned enterprises (SOEs) under the reform. Eased financing constraints, lowered financing costs, better access to tax incentives or government subsidies, lowered agency costs, better accounting information quality and more credit loans are underlying the impact. Additionally, cross-ownership connections amongst non-SOE executives and government intervention strengthen the impact, whilst regional marketisation weakens it.

This study adds to the literature on the association between mixed ownership reform and firm innovation by focussing on the conditions under which this impact is stronger. It also sheds light on the policy implications for SOE reforms in emerging economies.