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The impact of globalization and worldwide competition has become excruciatingly noticeable in China. The purpose of this study is to examine China’s transformation of…
The impact of globalization and worldwide competition has become excruciatingly noticeable in China. The purpose of this study is to examine China’s transformation of state‐owned enterprises (SOEs) to competitive, capable organizations by identifying the dominant challenges and forces for change to State‐Owned Enterprises in China (SOE), the nature of SOE responses to those forces, and the degree of SOE success in making the necessary transformations to compete in a global business environment.
The primary objectives of this paper are to: develop a multi‐attribute pattern of the corporate governance model in Thai state‐owned enterprises; assess the relative…
The primary objectives of this paper are to: develop a multi‐attribute pattern of the corporate governance model in Thai state‐owned enterprises; assess the relative importance of different corporate governance practices; and provide detailed information of each corporate governance practice.
Qualitative and quantitative approaches were used. A case study was conducted to gather information on specific corporate governance behaviors in Thai state‐owned enterprises. Then a questionnaire was developed and tested in 38 Thai state‐owned enterprises. Factor analysis was conducted to examine a common framework of corporate governance practices.
This research demonstrated the multi‐attribute nature of the corporate governance model in Thai state‐owned enterprises. According to this model, the most important corporate governance practice is strategic human resource management, followed by information technology, board of directors, risk management, internal control, and internal audit sequentially. Additionally, this study brings out insights into corporate governance practices that represent the specific characteristics of Thai state‐owned enterprises.
This study is limited by the fact that the sample represents only Thai state‐owned enterprises. Further studies should be conducted to better understand the complexity of the multi‐attribute nature of the corporate governance model in state‐owned enterprises in developing countries.
Policy makers can utilize the multi‐attribute nature of the corporate governance model as a guideline for the further development of corporate governance practices in other state‐owned enterprises.
This study demonstrated the multi‐attribute nature of the corporate governance model in state‐owned enterprises in developing countries such as Thailand. This research confirms the broad principles of corporate governance as well as providing detailed information on corporate governance practices from a new perspective.
China has achieved continuous economic growth and become more integrated with the global economy since the start of the current financial crisis in late 2008. As the…
China has achieved continuous economic growth and become more integrated with the global economy since the start of the current financial crisis in late 2008. As the second largest economy in the world, China's political policies, economic and social development have influence on global economy. Attention has been paid worldwide to the current Chinese legal system, political policies and the development of economic reform since China entered the World Trade Organisation in November 2001. The corporate governance reform is the centre of the enterprise reform. In September 1999, The Fourth Plenum of the Chinese Communist Party's 15th central Committee identified that corporate governance is the core of the modern enterprise system. In recent years China has made significant progress in developing the foundations of a modern corporate system. There are more than 1,200 companies which have successfully diversified their ownership through public listing and 80% of small and medium size companies have been transformed into non-state-owned enterprises. More and more state-owned enterprises are on the way to transforming into corporations. China has formed a legal framework for corporate governance.
The chapter aims to analyse the influence of the board of directors on transparency and integrity in hybrid organisations like state-owned enterprises. The effect of…
The chapter aims to analyse the influence of the board of directors on transparency and integrity in hybrid organisations like state-owned enterprises. The effect of several characteristics of directors on the board’s effectiveness was assessed. The empirical analysis was based on 60 Italian listed and non-listed state-owned enterprises. Each enterprise’s website was individually examined and coded to obtain two self-constructed indexes on transparency and integrity, and a regression model was created to test the hypotheses.
The ‘knowledge structure’ of interlocking directors and board compensation were found to be both positively related to the level of commitment among state-owned enterprises to transparency and integrity. Skill and gender diversity on the board had no significant impact. The analysis used data from a one-year period but dealt with hidden and complex phenomena like corruption. Future longitudinal studies and qualitative approaches would provide more comprehensive insights into the relationship between the board of directors, transparency and integrity over time.
Policymakers and all those involved in the appointment of directors to state-owned enterprises should be aware that some features of board members may affect the levels of organisational transparency and integrity. The chapter contributes to the literature on governance of state-owned enterprises, emphasising the board’s role and its effectiveness in sustaining transparency and integrity.
State‐owned enterprises (SOEs), in general, have not been successful. Their indifferent performance has been at the center of the debate about the role of the state in the…
State‐owned enterprises (SOEs), in general, have not been successful. Their indifferent performance has been at the center of the debate about the role of the state in the economy. To economists, the performance of SOEs is evidence of what is wrong with state intervention. And in recent years privatization has increasingly been regarded as the only way of improving the performance of SOEs. Yet, while unsuccessful SOEs abound, a few high‐performing SOEs such as POSCO (South Korea), Airbus Industrie (France), EMBRAER (Brazil), and MUL (India) can also be found.
The purpose of this paper is to examine how corporate governance instruments impact firm value in the context of Pakistan. This paper considers state- and non-state-owned…
The purpose of this paper is to examine how corporate governance instruments impact firm value in the context of Pakistan. This paper considers state- and non-state-owned enterprises and examines whether the influence of corporate governance on firm value varies across firms having different nature of ownership.
This study opts for an unbalanced sample of state- and non-state-owned enterprises for the period 2010-2014. Panel data regression is adopted for estimation of main results. The suitable model, i.e. fixed and random effect model, is selected using Hausman specification test.
The notable findings show that board independence has a significant and positive relationship with firm value only for state-owned companies. Furthermore, the results show that market capitalization and return on assets have a significant and positive association with firm value for both state- and non-state-owned enterprises. All other variables are found insignificant for both state- and non-state-owned companies, but the results are consistent with those reported in previous studies.
The findings of the study suggest that fair induction of independent directors, appropriate board size and cost-benefit analysis to conduct frequent meetings can help corporations to improve their performance.
This study is adding to the current literature by providing new insights and shows that the impact of corporate governance on firm value varies across firms of different types of ownership, i.e. state- and non-state-owned enterprises.
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…
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.
This chapter sheds light on how the internationalization of state-owned enterprises (SOEs) is jointly influenced by the ownership involvement of the state and other…
This chapter sheds light on how the internationalization of state-owned enterprises (SOEs) is jointly influenced by the ownership involvement of the state and other relational investors and by the home country’s institutional setting. It integrates international business literature and insights from the theory of corporate governance into a varieties of capitalism framework. Taking a configurational perspective, the interdependencies that link the SOE internationalization to the joint effects of particular combinations of actors and institutions are analyzed. As a result, it is argued that only a few home country–SOE governance configurations favor the expansion of SOEs abroad: (i) a configuration in which the state is a dominant owner capable of aligning the interests of any other private shareholder and the government is embedded in a proactive institutional context, so as to effectively orchestrate the internationalization process, (ii) a configuration in which, assuming the home country institutions markedly deficient in supporting interventions, relational co-owners are involved in SOE ownership and governance and have commitment, influential power, and competencies to equip the company with an effective strategy and competitive advantages to be exploited abroad. In all other configurations, the international performance of SOEs is worse, being undermined by institutional contexts that favor an inward-looking approach of the state and government, and/or by principal–principal agency problems.
We question whether the Chinese state has played an effective role in promoting outward foreign direct investment via its “Go Global” policies. Using the literature in…
We question whether the Chinese state has played an effective role in promoting outward foreign direct investment via its “Go Global” policies. Using the literature in International Management as our framing, we observe three inter-related stylized realities. First, it is state-owned enterprises (SOEs) – not private enterprises – that tend to principally benefit from the favorable “Go Global” policies. Second, SOEs tend to pay much higher acquisition premiums in outward FDI as compared to non-SOEs. Third, SOEs tend to be less effective as compared to non-SOEs in gaining synergies and enhancing competitiveness as a result of these cross-border experiences. These results yield clear policy implications for the Chinese government: first, more effective public policy would involve enhanced targeting of private enterprises as the recipients of policies promoting outward FDI; second, the Chinese government should continue along the path toward privatization of SOEs. The continued bolstering of economic and social development in China is contingent upon efforts to reduce the state’s active role in outward FDI.
In this paper, we conduct a conceptual and bibliographic analysis of the literature that deals with the international strategy of state-owned enterprises (SOEs), with…
In this paper, we conduct a conceptual and bibliographic analysis of the literature that deals with the international strategy of state-owned enterprises (SOEs), with particular attention to SOEs from emerging economies (EEs). We first review the state of the art in defining the concepts of EEs and SOEs. We then conduct a detailed bibliographic analysis of the literature pertaining to SOEs’ involvement in international activities, whether as outward foreign investors or as potential local partners of inward-investing multinational enterprises. The analysis covers general trends in the literature, prominent research questions and outcome variables, use of theories, and choices pertaining to methodology (type of research and effects, empirical contexts). We document a literature that is fast-growing and well balanced in some respects. In other respects, we advance recommendations pertaining to (a) consistency and precision in the use of the concepts of “state-owned enterprise” and “emerging economy”; (b) search for specific evidence on the outward activities of EE SOEs in less-developed economies and even in other EEs, and on their performance; (c) understanding of relative propensities of local SOEs and inward investors to collaborate, and what happens when SOEs encounter each other across borders; (d) opportunities to strengthen the theoretical foundations and contributions of this research; and (e) minding the mix of home and host countries in studies and avoiding undue generalization from what has become a predominantly China-centric literature.