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1
Alon, Ilan, Hua Wang, Jun Shen, and Wenxian Zhang. "Chinese state-owned enterprises go global." Journal of Business Strategy 35, no. 6 (November 17, 2014): 3–18. http://dx.doi.org/10.1108/jbs-12-2013-0118.
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Purpose – The aim of this research is to examine the Chinese outward direct investment (ODI) from the perspectives of the Chinese state-owned enterprises (SOEs), focusing on their perceptions and important factors in the decision-making process. More specifically, it aims to understand where and why Chinese SOEs are investing. Increasingly integrated into the global economy, China has already become one of the largest investment economies in the world. Design/methodology/approach – Conducted by the China Center at Rollins College in collaboration with the Kedge Business School and the China Executive Leadership Academy at Pudong, survey data are collected from 63 Chinese SOEs that reflect the structure of Chinese industry and the membership of the China Council for the Promotion of International trade. Findings – Chinese SOEs have aligned their business expansion plans with the national priority, and played a dominant role in the current internationalization drive. They will likely increase their overseas investment substantially in both short and medium terms; their key business efforts include resource extraction, trading, services and manufacturing. Whereas Chinese ODIs tend to focus on the emerging economies in Asia, Africa and Latin America, more investments begin to take place in various developed countries, and many Chinese SOEs plan to increase their ODI in the USA, regarded as the most important market for overseas investment. Originality/value – This research contributes to a better understanding on the growing ODIs by the Chinese SOEs since the launch of the “going global” policy.
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Yu, Miaojie. "Corporate governance of state-owned enterprises in China." Corporate Ownership and Control 5, no. 1 (2007): 493–99. http://dx.doi.org/10.22495/cocv5i1c3p8.
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In the last thirty years, China has undergone three stages of corporate governance mechanisms, namely, (1) the “power-delegating and profit-sharing” system; (2) the “contracted managerial responsibility” system; and (3) the corporatization of large stateowned enterprises (SOEs). This paper will explore each mechanism, their advantages and disadvantages in detail. The main finding is that the various practices of corporate governance of SOEs are not suitable for China’s SOEs mainly due to the lack of sufficient incentive. Instead, a mixed mechanism of the “control-based” and the “marketoriented” mechanisms is more attractive given China’s unique institutional setting
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Ni, Jinlan, Wikil Kwak, Xiaoyan Cheng, and Guan Gong. "The Determinants of Bankruptcy for Chinese Firms." Review of Pacific Basin Financial Markets and Policies 17, no. 02 (June 2014): 1450012. http://dx.doi.org/10.1142/s021909151450012x.
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The global financial crisis in 2008 increased the number of business failures in the U.S. as well as in China. The Chinese economy has also been affected by the recent global financial crisis given the fact that the Chinese economy depends heavily on international trade. Our study tries to find the determinants of bankruptcy in Chinese firms. Both logit and survival model analyses provide consistent results on the determinants in predicting distressed firms in China. Our results suggest that firms with liquidity problems and firms experiencing a decline in profits are more likely to file for bankruptcy. In addition, we find that, compared to state-owned enterprises (SOEs), collectively-owned enterprises, private-owned enterprises, and foreign-owned businesses are more likely to file for bankruptcy. This conclusion is robust after controlling for regional differences. The findings of this study show that the financial variables developed by Altman [Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. Journal of Finance, 23(3), 589–609] and Ohlson [Financial ratios and probabilistic prediction of bankruptcy. Journal of Accounting Research, 18(1), 109–131] perform reasonably well in determining business failures of Chinese firms even though SOEs and shadow financing exist in China.
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Chen, Jean Jinghan. "Corporatisation of China’s state-owned enterprises and corporate governance." Corporate Ownership and Control 1, no. 2 (2003): 82–93. http://dx.doi.org/10.22495/cocv1i2p7.
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This paper reviews the notable Chinese State-Owned Enterprises’ (SOEs) low efficiency and shows that the agency problems with SOEs constitutes the characteristics of corporate governance - insiders’ control, soft budget constraints, managerial slack and lack of competent managers. It is this corporate governance structure that results in SOEs’ inefficiency. The paper further argues that the current corporatisation of SOEs in China through share issue does not improve corporatised SOEs’ performance because it has not effectively dealt with the agency problems associated with public ownership, and, therefore, falls short in addressing the critical issue of corporate governance. The creation of an effective corporate governance mechanism requires the development of the country’s market-oriented institutions. It is difficult to prescribe what type of governance structure China should adopt, although it is argued that for former SOEs a neo-corporatist approach with a two-tier board structure may have advantage over a neo-liberal approach with a single board. For China, the most important issue is not to find a fixed set of governance models from which to copy, but to develop institutions that are conducive to effective corporate governance.
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Tang, Jintong, Zhi Tang, and Birton J. Cowden. "Exploring the Relationship between Entrepreneurial Orientation, CEO Dual Values, and SME Performance in State–Owned vs. Nonstate–Owned Enterprises in China." Entrepreneurship Theory and Practice 41, no. 6 (November 2017): 883–908. http://dx.doi.org/10.1111/etap.12235.
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Most entrepreneurial orientation (EO)–performance research focuses on identifying organizational–level contingent factors in developed countries. In this study, we advance EO research by examining how CEO self–enhancing and self–transcending values shape the relationship between EO and performance, differentially, in Chinese state–owned enterprises vs. nonstate–owned enterprises. Supporting self–concern and other–orientation theory, our sample of 148 manufacturing firms in the chemical industry in Eastern China indicates that the EO–performance relationship is stronger for high self–enhancing CEOs in state–owned enterprises, whereas the focal link is stronger for low self–enhancing CEOs in nonstate–owned enterprises.
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Wen, Yang. "Impacts of Political Connections on Private Enterprise Performance in China and the Analysis of Mediating Effects." International Journal of Economics and Finance 12, no. 11 (October 10, 2020): 28. http://dx.doi.org/10.5539/ijef.v12n11p28.
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Based on data of Chinese Private Enterprises Survey (CPES) from 2006-2014, this paper uses OLS model and other empirical methods to estimate the impacts of political connections on private enterprise performance in China, as well as heterogeneous effects and mediating effects of different types of political connections on tax burden and non-productive activities expense. The results show that, political connections contribute significantly to private enterprises. Compared with previous political connections, like working experiences in state-owned enterprises and government-affiliated institutions, current political connections, like deputies to the NPC or members of CPPCC, have played better and further roles in enterprise performance. Tax burden and non-productive activities expense have a mediation effect in the relationship between political connections and enterprise performance. This study replenishes new evidence to describe how political connections affect private enterprise performance in China, and partly explains why private enterprises are keen on setting up political connections, which may provide valuable tips to foster a new type of cordial and clean relationship between government and business in China.
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Pistrui, David, Wilfred Huang, Dolun Oksoy, Zhao Jing, and Harold Welsch. "Entrepreneurship in China: Characteristics, Attributes, and Family Forces Shaping the Emerging Private Sector." Family Business Review 14, no. 2 (June 2001): 141–52. http://dx.doi.org/10.1111/j.1741-6248.2001.00141.x.
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This study profiles new Mainland Chinese entrepreneurs and their enterprises as well as explores the cultural and family forces shaping small- and medium-size enterprise development. The study uncovers entrepreneurial motives, demographic attributes, and the type of businesses being established. Family and enterprise relationships relating to financial investment and employment are also presented. The majority of enterprises were found to be closely held small businesses focused on the retail and technology sectors. The findings suggest that entrepreneurs are motivated by the need for independent-based achievement and continuous learning around a family focus. Family played an active role in enterprise formation and development in China. Entrepreneurs were found to rely on family members both to establish and develop their enterprises. The majority of the entrepreneurs surveyed employed at least one family member on a full-time basis. Entrepreneurs were also found to use family finances as the primary source of start-up capital.
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Xie, En, and K. S. Redding. "State-owned enterprises in the contemporary global business scenario: introduction." International Journal of Public Sector Management 31, no. 2 (March 5, 2018): 98–112. http://dx.doi.org/10.1108/ijpsm-01-2018-0015.
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Purpose The purpose of this paper is to introduce the special issue on state-owned enterprises (SOEs) in the contemporary global business scenario. Against the theoretical background of and the invited themes for the special issue, the paper presents a summary of key findings and practical implications of the accepted papers and suggests future research directions. Design/methodology/approach The paper is conceptual, which organized through utilitarianism or legitimism; SOEs scenario 1 – hungry fox, hunting bears; SOEs scenario 2 – dancing elephant, flying bears; what do we know and what we wish to explore; what have been examined; what we need to study further; closing note by bears’ well-wishers; and protocol of the special issue. Findings By deeply looking into emerging economies (China, India), developed economies (Denmark, Italy, Sweden), transition economies (Tunisia) and diverse sectors (public transport, space), coupled with cross-country sample data, the nine accepted papers have discussed several interesting findings and recommended numerous implications for the policymakers and SOEs’ managers. Drawing upon the interdisciplinary literature, empirical and qualitative papers would deepen the understanding of the growth strategies and performance of SOEs, and the application of management theories such as institutional theory, agency theory, social exchange theory, managerial grid theory, incomplete contracts theory and public governance view, among others. The issue also brings a review-cum-citation analysis paper on the impact of privatization on the performance of SOEs. Originality/value The papers have made unique contributions to the public economics, new public management, international business and organizational development literature by critically analyzing the burgeoning phenomenon of the changing dynamics and globalization of SOEs.
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Liao, Yao-Tang, Tsung-Cheng Wu, and Tzu-Chuan Chou. "Key success factor in the innovative transformation of state-owned roller enterprises in China." Filomat 30, no. 15 (2016): 4279–86. http://dx.doi.org/10.2298/fil1615279l.
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The state-owned enterprises based iron and steel industry in China encountered the sharply decreasing business performance of large steel works resulted from the reform in 1990. Delphi Method is utilized for analyzing the strategies and approaches of innovative business model, and the MEFAS model is proposed for innovation management in roller industry, including material breakthrough, experience sales, focus marketing, corporate network alliance, real-time supply chain, reorganization, and innovative enterprise culture. Beijing Shougang Jingshun Rolls Co., Ltd. is sampled for the case study. Total 250 copies of questionnaires are distributed, and 178 valid copies are retrieved, with the retrieval rate 71%. The result shows that Material R&D Innovation, weighted 0.208, about 20.8% of overall weight, is mostly emphasized, followed by Local Supply Chain Innovation (weighted 0.174), Construction of Innovative Culture (weighted 0.168), Reorganization (weighted 0.142), Marketing Innovation (weighted 0.129), Organizational Network Innovation (weighted 0.116), and Sales Innovation (weighted 0.063).
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TANG, JINTONG, ZHI TANG, YULI ZHANG, and QIANWEN LI. "THE IMPACT OF ENTREPRENEURIAL ORIENTATION AND OWNERSHIP TYPE ON FIRM PERFORMANCE IN THE EMERGING REGION OF CHINA." Journal of Developmental Entrepreneurship 12, no. 04 (December 2007): 383–97. http://dx.doi.org/10.1142/s1084946707000733.
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Entrepreneurial orientation (EO) has been widely studied in the US context, but its examination in emerging regions such as China has been very limited. In this study, we investigate the EO-performance relationship in China. Results based on a sample of 166 firms in Northern China confirm the positive influence of EO on performance. More importantly, the EO-performance relationship is more positive among state-owned enterprises (SOEs) than among privately-owned enterprises (POEs). Research and practical implications for EO in China are discussed.
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M., Thenmozhi, and Aghila Sasidharan. "Does board independence enhance firm value of state-owned enterprises? Evidence from India and China." European Business Review 32, no. 5 (May 14, 2020): 785–800. http://dx.doi.org/10.1108/ebr-09-2019-0224.
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Purpose This study aims to examine the effectiveness of governance in state-owned enterprises (SOEs) and explores if board independence enhances the firm value of SOEs in India and China. The study further explores the moderation impact of promoter ownership in enhancing firm value. Design/methodology/approach The study is confined to government-owned enterprises in India and China and is based on a sample of 53 central government-owned firms listed in National Stock Exchange of India and 110 state-owned firms listed in Shanghai Stock Exchange of China for the period 2010–2017. A fixed-effect panel regression analysis has been used to examine the effect of board independence on firm value. Findings The study found that board independence adds value to the SOEs in India and China and the presence of independent directors (IDs) in the board of SOEs act as better monitors of performance to protect the interest of minority shareholders. Probably, they minimize agency conflict and provide resources to the firm and management. The greater the government shareholdings, the board independence further enhances value of SOEs in India and China. Practical implications Compliance with guidelines on IDs in SOEs serves as an effective corporate governance mechanism and the presence of IDs can signal better firm performance. The government promoters align with the IDs in better monitoring of SOE performance. Originality/value The study is unique and contributes to the literature by examining the impact of board independence on firm value in the context of SOEs in India and China and also provides insight on the effect of promoter ownership on the effectiveness on board independence.
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Zhang, Jianjun, and Hean Tat Keh. "Interorganizational Exchanges in China: Organizational Forms and Governance Mechanisms." Management and Organization Review 6, no. 1 (March 2010): 123–47. http://dx.doi.org/10.1111/j.1740-8784.2009.00148.x.
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AbstractThis article discusses how organizations exchange with one another in China, focusing on the type of organizational ownership and the form of governance mechanism. The theoretical foundation builds on institutional theory, resource dependence theory, agency theory, and evolutionary theory. Given the three main forms of organizations in China – state-owned enterprises, privately owned enterprises, and foreign-invested enterprises - we show how these organizations choose between two types of governance mechanisms, contracts and guanxi, to manage interorganizational exchanges. We then analyze the possible modes of interaction between organizational forms. We argue that the relative importance of guanxi is likely to decline or that guanxi will shift from being primary in some organizations to complementary in all organizations with the progress of market transition. This conceptual framework is expected to help provide the momentum for further theoretical exploration and empirical study in this area.
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Guo, Huiting, Fangjun Wang, and Junrui Zhang. "Attitudes Of Chinese Listed Enterprises Toward Cash Flow Manipulation: A Resource Dependence Perspective." Journal of Applied Business Research (JABR) 29, no. 1 (December 28, 2012): 263. http://dx.doi.org/10.19030/jabr.v29i1.7572.
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<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; line-height: 11.5pt; text-justify: inter-ideograph; mso-pagination: none; mso-line-height-rule: exactly;" class="MsoNormal"><span style="font-family: Times New Roman;"><span class="MsoCommentReference"><span style="color: black; font-size: 10pt; mso-themecolor: text1;">The prevalence of cash flow manipulation has drawn much scholarly attention in China and worldwide, especially since the </span></span><span style="color: black; font-size: 10pt; mso-themecolor: text1;">exposure of the accounting scandals at Enron, WorldCom, and Qwest. Cash flow status also provides a sound basis for corporate valuation. Using a sample of 12,251 firm-year observations from 1999 to 2009, this study thus investigates the attitudes and behavioral patterns of state-owned enterprises (SOEs) and non-SOEs in China toward cash flow manipulation. From a point of departure of resource-dependence theory, we find that non-SOEs tend to manipulate cash flow upward, whereas SOEs are more prone to manipulate cash flow downward. We also demonstrate that non-SOEs are more inclined to manipulate their cash flow statements compared with SOEs. The reason behind this differing behavior could be that non-SOEs are reliant on cash and funds from entities, such as governments and banks, and thus, they falsely enhance cash flow and firm performance in order to signal their solvency and thereby reduce financing costs. By contrast, since SOEs always receive sufficient cash inflows from both government sources and state-owned banks, the managers of these firms are unconcerned about cash flow shortages, which lessens their motivation to manipulate the figures. Indeed, this study finds that these managers may even reduce reported cash flow intentionally in order to obtain government assistance. Therefore, investors and regulators should make their judgments on the cash flow of entities based on their status as SOEs or non-SOEs.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>
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Hochstetler, Kathryn, and Genia Kostka. "Wind and Solar Power in Brazil and China: Interests, State–Business Relations, and Policy Outcomes." Global Environmental Politics 15, no. 3 (August 2015): 74–94. http://dx.doi.org/10.1162/glep_a_00312.
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This article examines developments in the renewable electricity sector in Brazil and China since 2000. The two countries share many interests with respect to solar and wind power, but institutional differences in state–business relations led to different outcomes. In China, in a context of corporatist state–business relations, state interventions were more far-reaching, with the state coordinating with state-owned banks, offering large financial and investment incentives to state-owned or state-connected enterprises. By contrast, in Brazil’s public–private partnerships, state support to promote renewable energies was shaped by a stronger preference for competitive auctions and stricter financing rules. The differences in state–business relations help explain the observed developmental trajectories in wind and solar power.
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Brødsgaard, Kjeld Erik. "Politics and Business Group Formation in China: The Party in Control?" China Quarterly 211 (September 2012): 624–48. http://dx.doi.org/10.1017/s0305741012000811.
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AbstractAs a result of economic reform and administrative restructuring in China, a number of powerful state-owned business groups (“national champions”) have emerged within sectors of strategic importance. They are headed by a new corporate elite which enjoys unprecedentedly high levels of remuneration and managerial independence from government agencies and which derives legitimacy from symbolizing China's economic rise. However, through the nomenklatura system, the Party controls the appointment of the CEOs and presidents of the most important of these enterprises and manages a cadre transfer system which makes it possible to transfer/rotate business leaders to take up positions in state and Party agencies. In order to conceptualize the coexistence of the contradicting forces for further enterprise autonomy and continued central control that characterizes the evolving relationship between business groups and the Party-state, this paper proposes the notion of integrated fragmentation.
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Cheng, C. S. Agnes, Jing Wang, and Steven X. Wei. "State Ownership and Earnings Management around Initial Public Offerings: Evidence from China." Journal of International Accounting Research 14, no. 2 (June 1, 2015): 89–116. http://dx.doi.org/10.2308/jiar-51193.
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ABSTRACT This study investigates earnings management by firms around their initial public offerings (IPOs) in domestic Chinese equity markets. Using a sample of 437 IPO firms, we find that Chinese firms tend to inflate earnings around their IPOs. We also show that state-owned enterprises (SOEs) manage earnings to a lesser degree than non-state-owned enterprises (NSOEs) do around IPOs. Furthermore, using path analysis, we find that two incentive factors, CEO shareholding and accessibility to bank loans, explain 48 percent of the correlation between state ownership and earnings management for IPO firms. In particular, accessibility to bank loans is a more important incentive factor that leads to less earnings management for SOEs than NSOEs.
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Tomasic, Roman, and Jenny Jian Rong Fu. "Government-owned companies and corporate governance in Australia and China: beyond fragmented governance." Corporate Ownership and Control 3, no. 4 (2006): 123–31. http://dx.doi.org/10.22495/cocv3i4p10.
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The ownership and control of government owned companies presents a major challenge for the integrity of established corporate law ideas regarding accountability of directors and the independence of government owned companies. Drawing upon experience from China and Australia, the article discusses some of the key corporate governance tensions that have emerged from the corporatization of state owned assets. The attempt to uncritically apply private sector ideas to the corporatisation of state-owned and controlled companies is fraught with difficulties that are discussed in this article. The article also examines attempts to place state owned companies on a sounder conceptual footing through changes to their culture brought about by adopting and embedding guidelines and standards, such as the recent OECD Guidelines on the Corporate Governance of State-owned Enterprises
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Liou, Chih-shian, and Chung-min Tsai. "The Dual Role of Cadres and Entrepreneurs in China." Asian Survey 57, no. 6 (November 2017): 1058–85. http://dx.doi.org/10.1525/as.2017.57.6.1058.
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By examining China’s state-monopolized industries, we explore the evolution of managerial behavior. With the party-state’s continued emphasis on meritocracy in elite management, managers of China’s state-owned enterprises play a hybrid role as both party cadres and business entrepreneurs. This also reflects the adaptability of the Chinese Communist Party in pursuing pro-market reform.
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West, Joel, and Justin Tan. "Qualcomm in China (B)." Asian Case Research Journal 06, no. 02 (December 2002): 101–28. http://dx.doi.org/10.1142/s0218927502000269.
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Case (B) covers Qualcomm's efforts from the mid 1990s to the present in getting CDMA adopted in the rapidly growing Chinese market. The case was originally designed to highlight the issues of political risk and transparency given the role of the Chinese government in decisions by state-owned enterprises and the highly volatile context of U.S.-China political relations. But the case also presents traditional problems of market entry and the ambiguities inherent during ongoing efforts for telecommunications reform.
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Yang, Junqing, and Hong Chen. "Can rewards incentives of non-state-owned enterprises realize co-win cooperation of workers, enterprises and the society?" Nankai Business Review International 10, no. 2 (June 3, 2019): 179–206. http://dx.doi.org/10.1108/nbri-03-2018-0020.
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Purpose This paper aims to examine whether rewards incentives of non-state-owned enterprises can settle the matters of motivation lack, strained labor relations and frequent labor-capital conflicts and realize co-win cooperation of workers, enterprises and the society. Design/methodology/approach Based on the data of 1,617 questionnaires in 257 enterprises, this research reveals the total rewards factors that affect the labor motivation of non-stated-owned enterprises in China and improve labor productivity by adopting the hierarchical linear regression analysis and multi-group path analysis, and establishes a new model of win-win cooperation between labor and capital and the society through the incentive function of these elements by stimulating the enthusiasm of workers, improving labor productivity, increasing profits, expanding capital accumulation and absorbing labor force. Findings The authors have discovered that in general the main incentives that stimulate the enthusiasm of employees are the factors of performance and recognition and development and career opportunity in total rewards. The factor of benefits also has a significant incentive effect on employees in the western area of China, migrant workers with lower education and male employees, but negative effect on the post-1990s employees in non-state-owned enterprises. However, the compensation factor should be used with caution when encouraging employees in eastern region and the post-1980s. The total rewards factors of development and career opportunities and the performance and the recognition and benefits should be used to motivate workers to improve labor productivity, increase corporate profits and absorb more labor force, which is a long-term solution to win-win cooperation between labor and capital and social sustainable development. It is an important way to increase profits and absorb more labor force by increasing employee’s human capital investment and improving labor proficiency of employees under age 45. The conclusions provide new effective management methods for non-state-owned enterprises in China. Practical implications As a consequence, it will encourage employees to improve labor productivity and increase profits and thus absorb more labor force, if we use these factors of performance and recognition, development and career opportunity and benefits integratedly, we will find a permanent solution that the two sides of the labor and management and the society enjoy a win-win cooperation. Originality/value The research will provide theoretical basis for non-state-owned enterprises to apply a new and effective management style so that we can establish a win-win cooperation between the labor and management. What’s more, the research will develop the Dual Economy Theory of Lewis and the employment theory of Keynes and will also provide a theoretical basis for the realization of Taylor’s harmonious industrial relations.
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Warmerdam, Ward, and Meine Pieter van Dijk. "Warmerdam and van DijkWhat’s Your Story? Chinese Private Enterprises in Kampala, Uganda." Journal of Asian and African Studies 52, no. 6 (January 25, 2016): 873–93. http://dx.doi.org/10.1177/0021909615622351.
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China has been engaged with Africa since the 1956. Following the domestic economic reforms of 1978, politically and ideologically motivated engagement gave way to economically and commercially driven cooperation. Successive waves of reforms in China have made the engagement more economically and commercially driven. Initially China’s engagement with Africa in general was dominated by China’s state-owned enterprises. More recently private enterprises have entered the arena. In discussions on China–Africa, China is often presented as a single actor. In fact, there are many ‘Chinas’ in Africa. More nuanced literature has disaggregated ‘China’ in Africa into different actors. With regard to China’s economic cooperation, the literature has either focused on its state-owned enterprises or the impacts of its commercial relations on local African business and populations. This paper intends to contribute to the growing literature on Chinese private enterprises in Africa. It provides a characterization of Chinese private companies in Kampala, Uganda, based on a recent survey of 42 Chinese enterprises there. It will present the data, analysis and stories of how and when they came, what problems they encountered and how these were solved based on the in-depth interviews that were carried out. The paper will show that many of these companies are relatively small, recent entrants in Uganda, motivated by the potential of the markets and increasingly facing problems with the authorities concerning their visas and work permits. It will be concluded that life for these private enterprises in Uganda is becoming gradually more difficult. There will be a shaking out of the companies that do not provide positive contributions to the local economy and society in general. This leaves many, especially smaller, Chinese private entrepreneurs uncertain about their future in Uganda.
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Ren, Shuang, and Ying Zhu. "Making sense of business leadership vis-à-vis China’s reform and transition." Leadership & Organization Development Journal 36, no. 7 (September 7, 2015): 867–84. http://dx.doi.org/10.1108/lodj-03-2014-0047.
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Purpose – The purpose of this paper is to explore the contemporary paradigm of business leadership vis-à-vis China’s reform and transitional context. Design/methodology/approach – The paper employs an evidence-based approach to explore the business leadership issues influenced by economic reform and within the context of societal transition in China. A qualitative research method was adopted based on in-depth interviews with a number of middle managers from a variety of Chinese enterprises, including state-owned, domestic-private and foreign-invested enterprises. Content analysis of several rounds of interviews added depth to the data analysis. Findings – The findings complement existing thoughts and illustrate concepts, issues, and characteristics not yet emphasized in mainstream literature. General patterns and associated characteristics of business leadership in China, as well as specific patterns associated with different forms of enterprise ownerships, are identified. Research limitations/implications – The study makes a timely and necessary contribution that enriches context-specific understandings of business leadership against the backdrop of surrounding economic, social, and cultural changes. Practical implications – The study enriches understandings of commonalities and differences in leadership across the globe, facilitating working collaboratively to achieve common goals in a global community. Originality/value – The study offers new insights into business leadership by linking contextual, personal, and cognitional factors together and demonstrates some unique characteristics of leadership styles in transitional economies like China.
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Eaton, Sarah. "The Gradual Encroachment of an Idea: Large Enterprise Groups in China." Copenhagen Journal of Asian Studies 31, no. 2 (May 23, 2014): 5–22. http://dx.doi.org/10.22439/cjas.v31i2.4331.
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This article illuminates the ideational foundations of China's 'large enterprise strategy', an early experiment in China's efforts to employ industrial policy to cultivate a group of state-controlled business groups. Based on archival research, the author argues that Chinese policymakers believed the development of state-owned large enterprises would bring several kinds of benefits, both economic and political. Drawing eclectically from Marxian economics and the history of capitalist development in East Asia, they argued that large enterprises could serve as both engines of domestic development and as safeguards and vanguards in the context of China's re-entry to the global marketplace. These enterprise groups were also seen as key elements in a market-conforming model of state control that senior officials began to envision and plan for as early as the late 1980s. The archival documents also shed light on internal debate in the 1980s and 1990s about the pros and cons of promoting monopolies, the substance of which anticipates much of the current heated discussion about China's 'monopoly industries' (longduan hangye垄断行业).
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Chen, Songsheng, Jun Guo, and Xiaoxiao Tong. "XBRL Implementation and Post-Earnings-Announcement Drift: The Impact of State Ownership in China." Journal of Information Systems 31, no. 1 (January 1, 2016): 1–19. http://dx.doi.org/10.2308/isys-51374.
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ABSTRACT In this paper, we test the impact of XBRL (eXtensible Business Reporting Language) on information asymmetry in the emerging market of China. We focus on the association between XBRL and information asymmetry (proxied by Post-Earnings-Announcement Drift [PEAD]) across two ownership structures: state-owned enterprises (SOEs), which are dominant in China, and non-state-owned enterprises (non-SOEs). We find that information asymmetry diminishes significantly, as reflected by a significant decline in PEAD, after the mandatory adoption of XBRL, and it diminishes more significantly in SOEs than non-SOEs. Our results remain robust after we control for market and accounting factors that may influence PEAD. Our paper not only supports XBRL's role in improving the market efficiency of the emerging market, but also first documents the impact of government ownership on the implementation of XBRL.
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Breth, Ron. "Wholly Foreign-Owned Enterprises as a China Market Entry Option: An Australian Case Study." Journal of Asia-Pacific Business 3, no. 4 (March 11, 2002): 45–67. http://dx.doi.org/10.1300/j098v03n04_04.
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Hu, Lamei, and Honghua Wu. "Exploratory study on risk management of state-owned construction enterprises in China." Engineering, Construction and Architectural Management 23, no. 5 (September 19, 2016): 674–91. http://dx.doi.org/10.1108/ecam-05-2014-0064.
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Purpose There is a relatively low risk management (RM) level and maturity in China’s state-owned construction enterprises (CSCEs). The purpose of this paper is to find the main factors impacting RM in practice to promote rapid, sound and sustained development in CSCEs. Design/methodology/approach There are a few state-owned CSCEs in China. Most enterprises know little about RM. Because of the limited number of RM departments in these enterprises, 200 questionnaires were sent to the enterprises to investigate the RM strategies employed by them. The research is quantitative and used a questionnaire survey to determine the important factors influencing RM practice. The collected data were analyzed with the Statistical Package for the Social Sciences to identify the most important factors affecting RM as well as the extent of influence of these factors, in order to facilitate further research. Findings The survey revealed the top eight factors (i.e. leaders’ support, personnel’s responsibility, comprehensiveness of identification, costs and benefits, risk appetite, understanding of language, frequency of training and performance management) that highly impact RM in CSCEs and the extent to which these factors impact RM. The data reveal that the average RM level is low. Some methods have been recommended to improve RM. Research limitations/implications The research lays the foundation for further RM development in CSCEs. The low RM level in CSCEs should encourage researchers to find better ways to improve RM. Some factors in the research will function as valuable guides for China’s private and public-private partnership enterprises. Practical implications A quantitative analysis methodology for RM has been developed for CSCEs that can reflect their RM level. In addition, the degree of impact of key factors on RM has been shown. The results can act as a reference to improve RM quantitatively, making the RM system more explicit in dealing with risks more accurately and instructively. Originality/value Structural RM research is utilized to evaluate RM in CSCEs by following an empirical method. With the continuous improvement in RM, CSCEs can cooperate well with construction enterprises of other countries for infrastructure projects and gain more benefits.
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Chang, Hsihui, Xin Dai, Yurun He, and Maolin Wang. "How Internal Control Protects Shareholders' Welfare: Evidence from Tax Avoidance in China." Journal of International Accounting Research 19, no. 2 (April 23, 2020): 19–39. http://dx.doi.org/10.2308/jiar-19-046.
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ABSTRACT This paper investigates how effective internal control protects shareholders' welfare in the context of corporate tax avoidance. Prior literature documents a positive association between internal control weakness and low tax avoidance. In this paper, we re-examine this association and complement prior research by finding that the direction of the association between internal control and tax avoidance depends on the level of tax avoidance. Specifically, for firms with low (high) levels of tax avoidance, internal control quality is positively (negatively) associated with tax avoidance. In additional analyses, we further explore how internal control mitigates agency costs for state-owned enterprises and tunneling activities. We show that for state-owned enterprises, which have lower incentives to avoid tax, effective internal control prevents managers from paying more taxes to cater to the controlling shareholders' interests. We also find that the association between tax avoidance and tunneling is reduced by effective internal control systems. Data Availability: Data are available from the public sources cited in the text.
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SIU, WAI-SUM, ZHI-CHAO LIU, and CHOO-SIN TSENG. "PRIVATE ENTREPRENEURS IN CHINA: AN EXPLORATORY STUDY." Journal of Enterprising Culture 01, no. 02 (November 1993): 203–14. http://dx.doi.org/10.1142/s0218495893000117.
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Tan (1987) and Dandridge and Flynn (1988) argue that both internal and external environments favour entrepreneurship development in China. Nevertheless, research studies about Chinese entrepreneurs only select Geteihu —one-man businesses (Tuan et al. 1986), private merchants (Wank, 1990), Xiangzhen Qiye—rural enterprises (Nolan and Dong, 1989), and corporate entrepreneurs (Siu, 1992) as sampling units. Siying Qiyejia, private entrepreneurs or owner-managers, especially those in manufacturing industries and services sectors are neglected. According to the classification of the Chinese government, private enterprises are businesses owned by individuals with 8 or more employees (Young, 1991). (For those below 8, they are classified as one-man business.) They mainly participate in the manufacturing and services sectors (Guo, 1992). This paper attempts to address the imbalance and also adds new insights to the body of knowledge by investigating private entrepreneurs in China. 70 owner-managers in Guangzhou, the business centre in South China, were selected for sampling. In-depth personal interviews with 14 private entrepreneurs were successfully arranged. The problems encountered by private entrepreneurs in China in ranking order are taxation, credit, human resource and growth. They indicate that the major cause for those problems lies in the Chinese government changing policies and regulations in relation to private enterprises too frequently. Most private entrepreneurs use the ‘let-it-be’ approach to handle those problems. However, a small portion of them get around them by establishing joint ventures with overseas investors. Under the joint venture umbrella, they no longer suffer from stringent controls imposed by government officials, but rather, be able to enjoy better investment incentives.
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Zhang, Xiaohong, Gaowen Tang, and Zhaohong Lin. "Managerial power, agency cost and executive compensation – an empirical study from China." Chinese Management Studies 10, no. 1 (April 4, 2016): 119–37. http://dx.doi.org/10.1108/cms-11-2015-0262.
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Purpose Based on the theory of “optimal contracting approach” and “the managerial power approach”, this paper aims to investigate whether senior executives of listed companies in China make use of their power to gain their own private benefits. The paper also compares compensation contracts between state- and private-owned enterprises to test whether there is a significant difference between senior executives from different ownership types of enterprises in terms of compensation contracts. Design/methodology/approach The paper raises four hypotheses based on the theories of “company agency”, “optimal contracting approach” and “managerial power approach”. After that, 5,680 A-share-listed companies of stock market in Shanghai and in Shenzhen Stock Market from 2008 to 2012 were taken as research samples to conduct a series of research analysis, including t-test, reliability analysis and regression analysis, with the help of SPSS 18.0. Findings The senior executives of listed companies in China could make use of their power to increase their own salary to gain power pay and, at the same time, company performance, company size and other factors that are important to influence the executive compensation. This paper further argues that senior executives of private-owned listed companies are more likely to use their power to obtain power pay and increase their own compensation. Additionally, the agency costs of Chinese listed companies are negatively related to the performance pay of senior executives, whereas there is no obvious negative correlation with the power pay of senior executives. Practical implications This paper takes multiple, in-depth approaches to study the relationship among managerial power, agency cost and executive compensation and to find out the differences in compensation contracts of senior executives between private-owned listed companies and state-owned companies. It also provides necessary suggestions to ensure the interests of stockholders, such as: optimizing the management structure of listed companies; improving the transparence of information disclosure of listed companies; establishing effective mechanism of incentive and constraint; and improving and standardizing the market of professional managers. Social implications The compensation contract of senior executives in China is critical to enhance enterprises’ performance, and it will become an important factor that will facilitate the interests of stockholders and management. However, this paper argues that some phenomena of over-payment of senior executives in listed companies cannot be explained by the theory of “optimal contracting approach”, but it is necessary and important to compare the differences of compensation contract of senior executives between private-owned listed companies and state-owned companies. A series of findings are proposed in this paper. Originality/value This paper made use of a principal analysis to extract the main factors that could represent the managerial power from different angles. In addition, this paper also compared the differences between compensation contracts of senior executives between private-owned listed companies and state-owned companies. Additionally, in this paper, the compensation of senior executives was divided into “power compensation” and “performance compensation”, which were used to test the relationship with the management cost of companies.
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Milhaupt, Curtis J. "The state as owner—China’s experience." Oxford Review of Economic Policy 36, no. 2 (2020): 362–79. http://dx.doi.org/10.1093/oxrep/graa001.
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Abstract This essay explores China’s experience with state ownership of business enterprise. After a short historical survey of the rise, fall, and re-emergence of the state-owned enterprise (SOE) as a form of business organization, the essay examines the creation, ownership structure, and role of SOEs under Chinese state capitalism. It further discusses the government’s ongoing efforts to reform its SOEs. These efforts are illuminating because they highlight the serious tension inherent in the party-state’s dual goals of maintaining SOEs as a tool for advancing non-financial social and industrial policy objectives, and addressing the corporate governance challenges of these enterprises. The essay concludes by examining implications from the preceding analysis—for China’s domestic economy, for policy-makers outside China, and for the corporate form itself.
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Wang, Dong, and Desheng Wu. "Equity incentive and risk taking: evidence from China." Nankai Business Review International 8, no. 1 (March 6, 2017): 80–99. http://dx.doi.org/10.1108/nbri-10-2016-0034.
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Purpose China has formally implemented equity incentive for more than 10 years; thus, a considerable number of equity incentive programs has entered the exercise period. This means that it is time to conduct a comprehensive analysis of the incentive effects of equity incentive throughout the whole implementation phase. The purpose of this paper is to examine the relationship between equity incentive, enterprise’s risk taking and risk decisions in China. Design/methodology/approach Using sensitivity of executives’ wealth and stock price (Delta) to measure the alignment effect and using sensitivity of executives’ wealth and stock return volatility (Vega) to measure the risk-taking effect, this paper aims to empirically test the relation of equity incentive and enterprise’s risk taking and risk decisions. Findings The authors find that Vega is positively related to risk taking; however, this improvement was mainly reflected in the private enterprises rather than state-owned enterprises. In terms of corporate policy choice, the authors find that Vega is positively related to firm focus and leverage. But, they have not found that Vega can promote R&D investment. Originality/value Existing studies have mostly concerned about the executives’ opportunistic behavior; however, analyses of the positive effect of equity incentive are limited. The authors use a combination of risk-taking incentives and alignment incentives to test the relationship between equity incentive and risk taking.
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Li, Liuchuang, Gaoliang Tian, and Wenjia Yan. "The Network Of Interlocking Directorates And Firm Performance In Transition Economies: Evidence From China." Journal of Applied Business Research (JABR) 29, no. 2 (February 13, 2013): 607. http://dx.doi.org/10.19030/jabr.v29i2.7661.
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<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 36.1pt 0pt 0.5in; text-align: justify; text-justify: inter-ideograph; mso-pagination: none; mso-outline-level: 1;" class="MsoNormal"><span style="font-family: Times New Roman;"><span style="font-size: 10pt; mso-fareast-font-family: SimSun; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;">Using </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;">a Chinese sample containing 8727 firm-years over the period from 2005 to 2010, we investigate the economic effect of interlocking directorate networks, and find that firms with central position</span><span style="font-size: 10pt; mso-fareast-font-family: SimSun; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;"> measured by network centrality</span><span style="font-size: 10pt; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;"> in interlocking directorate networks earn superior one</span><span style="font-size: 10pt; mso-fareast-font-family: SimSun; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;">-</span><span style="font-size: 10pt; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;"> to three</span><span style="font-size: 10pt; mso-fareast-font-family: SimSun; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;">-</span><span style="font-size: 10pt; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;">year ahead performance measured by return on assets (ROA) and return on Sales (ROS). We also show that the economic effect of interlocking directorate network is more pronounced in non-state-owned enterprises (NSOEs) compared to state-owned enterprises (SOEs). Our evidence is important, because it shows that </span><span style="font-size: 10pt; mso-fareast-font-family: SimSun; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;">to some extent</span><span style="font-size: 10pt; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;"> </span><span style="font-size: 10pt; mso-fareast-font-family: SimSun; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;">the </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;">interlocking directorate network can </span><span style="font-size: 10pt; mso-fareast-font-family: SimSun; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;">serve </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN; mso-font-kerning: 22.0pt; mso-bidi-font-weight: bold;">as an solution to the institutional voids which are derived from the reform in Chinese translation economy. </span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>
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Hofman, Peter S., Jeremy Moon, and Bin Wu. "Corporate Social Responsibility Under Authoritarian Capitalism: Dynamics and Prospects of State-Led and Society-Driven CSR." Business & Society 56, no. 5 (December 28, 2015): 651–71. http://dx.doi.org/10.1177/0007650315623014.
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This article introduces the concept of corporate social responsibility (CSR) in the seemingly oxymoronic context of Chinese “authoritarian capitalism.” Following an introduction to the emergence of authoritarian capitalism, the article considers the emergence of CSR in China using Matten and Moon’s framework of explaining CSR development in terms both of a business system’s historic institutions and of the impacts of new institutionalism on corporations arising from societal pressures in their global and national environments. We find two forms of CSR in China, reflecting the “multiplexity” of its business system: one in the mainly family-owned small and medium-sized enterprise sector reflecting concern with local reputation, and another in the corporate, mainly state-owned enterprise (SOE) sector, reflecting global and national societal expectations. We investigate the dynamics of CSR in China through the interplay of the global and national societal pressures and mediating and even leading roles played by the State and the Party. We consider the conceptual integrity and practical prospects for “state-led society-driven” CSR and future research opportunities, including those opened up by the three contributing articles to this special issue.
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Fischer, William A. "Changing the Chinese competitive landscape: Reform of state‐owned enterprises in China." Global Economic Review 28, no. 1 (January 1999): 91–104. http://dx.doi.org/10.1080/12265089908449753.
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CAO, Yonghui, and He JIANG. "Analysis of problems and policy suggestions in the construction of business environment in China." E3S Web of Conferences 214 (2020): 03009. http://dx.doi.org/10.1051/e3sconf/202021403009.
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Building a good business environment is of positive significance for the healthy growth of enterprises and the high-quality development of China’s economy. China has achieved positive results in recent years, but there are still problems in some aspects, which has become an obstacle to the further development of China’s economy. Therefore, based on the actual situation of our state-owned business environment, this paper focuses on the core problems, analyzes the causes and puts forward relevant policy recommendations. This paper mainly analyzes the construction of government environment, business law environment and the internationalization of business environment, so as to provide reference and reference for the high quality of China’s economy.
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Yang, Kun (Michelle), and Michael J. Pisani. "When informality meets formality: evidence from China." Chinese Management Studies 12, no. 1 (April 3, 2018): 184–201. http://dx.doi.org/10.1108/cms-03-2017-0055.
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Purpose This study aims to explore “what impact does competition from informal enterprises have on formal firms” within the Chinese economic and business environment. Design/methodology/approach The paper opted for an exploratory study utilizing the cross-sectional survey data “2012 China Enterprise Survey” conducted by the World Bank. The survey is composed of approximately 200 business-related questions across the spectrum of business operations. In all, 2,700 privately owned Chinese firms are included in the logistic regression analysis. Findings Results show the impact of informal firm competition upon formal firms in China are influenced by geographical location, industry sector, ownership profile, governmental ownership, online presence and the extent of obeying labor regulations or the time spent in handling the governmental regulatory environment. There is a competitive and complementary simultaneous intertwined relationship between formal and informal economy. It occurs in a formal economy not fully divorced from the structural inertia of the planned economy as it transitions to a market-based economy. Practical implications This paper extended the assumption of institutional theory and presented it as a dynamic view of the evolution of organizations. It contributes by offering a simultaneous dual relationship between the formal and informal economy. It also adds one more potential feature of populations in the population ecology theory. Originality/value This exploratory paper empirically examines the impacts of informal sector enterprises on formal sectors firms in China and proposes a dual force effect of the informal economy to the formal economy given the current Chinese institutional environment. The study also provides a platform for further research on the interactions between the formal and informal sectors in emerging markets.
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Nee, Victor, and Yang Cao. "Market Transition and the Firm: Institutional Change and Income Inequality in Urban China." Management and Organization Review 1, no. 01 (March 2005): 23–56. http://dx.doi.org/10.1111/j.1740-8784.2004.00003.x.
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This paper examines how the rise of a market economy in urban China redefines the rules governing economic activities and affects on earnings inequality. We identify three causal mechanisms linked to institutional change that are transforming the firm's employment practices: the higher marginal productivity of a private enterprise economy relative to state-owned enterprises, competition by firms for skilled and semi-skilled labor following emergence of labor markets and the end of state monopoly on labor allocation, and increased emphasis on merit-based reward systems in firms. Analyses of survey data from urban China show how these three causal mechanisms stemming from the transition to a market economy contribute to new patterns of earnings differentiation that increase income returns to human capital and private-sector entrepreneurship.
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Ci-sheng, Wu, and Zhou Zhen. "Anhui Xuanjiu Group: creating happiness for employees." Emerald Emerging Markets Case Studies 3, no. 1 (April 19, 2013): 1–13. http://dx.doi.org/10.1108/eemcs-12-2012-0209.
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Subject area Labour relations management, business management, HRM, focusing on the labour relations of Chinese enterprises. Study level/applicability This case is designed for students in schools of business or management, undergraduate MBA or executive MBA classes. Students should already have a basic knowledge about Chinese labour relations, HRM, and organizational development. Case overview In 2004, a deal transformed Anhui Xuanjiu Group from a state-owned enterprise (SOE) to a private company. Li Jian, the Chairman of Xuanjiu Group, focused on creating happiness for employees. Thanks to Li Jian's efforts, Xuanjiu emrged from its crisis which was formed in the planned economy system. After several years of development, the labour relations management of Anhui Xuanjiu Group became a model among private enterprises in China. Expected learning outcomes Students can gain new insights into labour relations in China. The case provides an example of building friendly labour relations to avoid labour disputes. It provides a set of measures for retaining and motivating workers. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
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Zheng, Haidong, and Yue Zhang. "Do SOEs outperform private enterprises in CSR? Evidence from China." Chinese Management Studies 10, no. 3 (August 1, 2016): 435–57. http://dx.doi.org/10.1108/cms-10-2015-0225.
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Purpose The purpose of this paper is to explore the relationship between firm size, the nature of ownership and corporate social responsibility (CSR) performance in China and to figure out the reason that state-owned enterprises (SOEs) usually perform better in CSR activities than private enterprises. Design/methodology/approach The authors conducted two studies of CSR in China. In the first study, the authors developed and assessed a CSR measure; second study was to investigate the difference of CSR behavioral performance between SOEs and private enterprises. Findings The authors found that the differences in CSR performances between SOEs and private enterprises were not caused by the nature of ownership as most Chinese scholars used to believe. Actually, the differences came from the differences of firm size, which had been ignored in prior studies on factors influencing CSR performance. The size of SOEs is usually much larger than private enterprises, and larger enterprises often perform better in the field of CSR. In a word, the size rather than the nature of ownership is the main reason that CSR performances of SOEs are better than private enterprises. Originality/value Though many papers in China suggested that SOEs performed much better than private enterprises in CSR activities, the authors proved that this belief was a misunderstanding. It was found that SOEs were usually larger than private enterprises, which might have confused their efforts to find the real reason that SOEs and private enterprises perform differently in CSR. The authors also developed a measuring tool of CSR based on the Stakeholder Theory, which would be a new measurement tool for future studies, especially for emerging market economies and unlisted companies.
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Li, Shaomin, Jun Xia, Cheryl Xiaoning Long, and Justin Tan. "Control Modes and Outcomes of Transformed State-Owned Enterprises in China: An Empirical Test." Management and Organization Review 8, no. 2 (July 2012): 283–309. http://dx.doi.org/10.1111/j.1740-8784.2011.00232.x.
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The transformation of state-owned enterprises (SOEs) into efficient entities has been an important approach in transition economies. However, the transition literature reveals little about how control structure affects firm performance of transformed SOEs. Drawing on agency theory, we distinguish three modes of control in transformed SOEs: state-controlled, dispersedly controlled, and privately controlled modes and argue that actual control after transformation plays a critical role in determining performance. Examining the impact of different control modes in China, we find that the key is who controls the transformed firm. Non-state-controlled (dispersedly controlled and privately controlled) firms are more likely to have enhanced post-transformation performance and reduced agency costs than state-controlled firms.
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Wang, Shuo, Wei Huang, Yuhui Gao, Sean Ansett, and Shiyong Xu. "Can socially responsible leaders drive Chinese firm performance?" Leadership & Organization Development Journal 36, no. 4 (June 1, 2015): 435–50. http://dx.doi.org/10.1108/lodj-01-2014-0006.
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Purpose – The relationship between socially responsible leaders, the key driver of corporate social responsibility (CSR) practices, and organizational financial performance is a salient issue in the global context for both CSR scholars and practitioners. The purpose of this paper is to provide much-needed insights into the interplay of responsible leadership, CSR practices, and organizational outcomes. Design/methodology/approach – It analyses 85 CEOs’ behaviors and their companies’ performance in a two-year database. It thereby enriches understanding of how leaders’ socially responsible decisions impact upon CSR engagement and firm performance. Findings – The results suggest that socially responsible leaders were positively related with organizational performance of return on equity (ROE). The aspects of integrity, morality, and stakeholder relationship aspects of responsible leadership are closely related to CSR. However, CSR practices were negatively related to ROA and ROE. It implies that in China CSR activities could not boost organizational performance in the short term, at least in two years. Research limitations/implications – Our research has clear limitations. First, most selected firms are renowned large corporations, state-owned, or private enterprises. Foreign-owned enterprises are excluded. Second, the evaluation of CSP is based on the content analysis of firms’ annual CSR reports. Our research has clear limitations. First, most selected firms are renowned large corporations, state-owned, or private enterprises. Foreign-owned enterprises are excluded. Second, the evaluation of CSP is based on the content analysis of firms’ annual CSR reports. Practical implications – Our research has practical implications for the business world. First, CSR practices in China shall be conducted in a strategic way. Second, responsible leadership is of significance for the Chinese MNCs that are overseas to build trustful stakeholder relations with local stakeholders. Originality/value – Based on the data analysis, this study provides in-depth discussion of CSR situation in China and its relationship with firm performance, which is one of the first studies to examine responsible leadership in Chinese context and investigate the relationship between responsible leadership and organizational performance.
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Liang, Xin, Lin Xiu, Sibin Wu, and Shujuan Zhang. "In search of sustainable legitimacy of private firms in China." Chinese Management Studies 11, no. 3 (August 7, 2017): 555–78. http://dx.doi.org/10.1108/cms-02-2017-0026.
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Purpose Private firms in China are like the third child in a family, constantly struggling to establish their position in an environment favoring their state-owned and collective siblings. The purpose of this paper is to discover some long-term-oriented legitimacy building strategies for private firms in China. Design/methodology/approach This paper examines the effect of both internal and external institutional factors on long-term legitimacy for private enterprises. The authors integrate stakeholder perspective and institutional theory to provide a framework of building sustainable legitimacy. Findings The authors’ framework delineates that a private company can build sustainable legitimacy through catering long-term legitimacy conferring to constituents such as customers, social responsibility and patriotism in the external institutional environment. Practical implications The authors’ framework further indicates how private firms could leverage internal institutional environment through developing appropriate mission, culture, leadership and human resources practices in conformity to the demands of constituents for gaining long-term legitimacy. Originality/value This paper is the first to address the short-term nature of legitimacy building strategies proposed in the past literature. In addition, it is also the first attempt to explore the multiplicity in legitimacy in China in search of long-term legitimacy building approaches.
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Zeng, Changli, Lu Zhang, and Jiangtao Li. "The impact of top management’s environmental responsibility audit on corporate environmental investment: evidence from China." Sustainability Accounting, Management and Policy Journal 11, no. 7 (September 7, 2020): 1271–91. http://dx.doi.org/10.1108/sampj-09-2018-0263.
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Purpose The purpose of this paper is to examine the effect of top management’s environmental responsibility audit (ERA) implementation on firms’ investment for environmental protection in China. Design/methodology/approach The sample comprises firms publicly traded on A-Share in China from 2011 to 2017. The authors used the ordinary least squares regression model to test the relation between ERA implementation and corporate environmental investment. Findings Firms’ environmental investment increases significantly after the ERA implementation. Compared to state-owned enterprises (SOEs), non-state-owned enterprises (non-SOEs) are more likely to increase their environmental investment after ERA implementation. Moreover, such change is more likely for non-heavily polluting enterprises (non-HPEs) compared to heavily polluting enterprises (HPEs). Practical implications This paper provides an in-depth analysis of the positive influence of environmental enforcement on corporate behavior, which could serve as reference for regulators on the latest environmental accounting practice in China and other emerging economies. Social implications This paper shows that clear assignment of environmental responsibility and subsequent assessment of environmental performance are contributing factors to effective and efficient implementation of an environmental management system. Originality/value Contributing to accounting and environmental management literature, this paper explains how mandated environmental audit incentivizes firms to deal with environmental issues. Because there is no prior research concerning the mandatory implementation of environmental audit in China, this paper is of high-innovatory value by providing a better understanding of environmental auditing and providing an economic explanation for government intervention as an effective means of mitigating environmental degradation in emerging economies.
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Lin, Yi-Hua, Yenn-Ru Chen, and Jeng-Ren Chiou. "Ownership control and rights offerings in Chinese listed firms." Corporate Ownership and Control 5, no. 4 (2008): 481–91. http://dx.doi.org/10.22495/cocv5i4c5p8.
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Most Chinese listed companies were transformed from state-owned enterprises (SOEs). Institutional transformation results in an ownership structure that is characterized by highly concentrated ownership and state-owned shares, which may exert an influence on corporate finance. In China, listed companies rely heavily on equity for capital needs, but the government blockholders often subscribe to no shares or to partial shares; they tunnel seasoned offering equity (SEO) capital to their nonprofit units through related party transactions. Therefore, we examine large shareholders’ rights offering behavior and firms’ subsequent operating performance. The results reveal that with a higher ratio of state-owned shares, large shareholders tend to give up all preemptive rights for new shares of stock. Evidence confirms a predicted positive relation between large shareholders’ full rights subscription behavior and firms’ subsequent operating performance
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Song, Malin, Mei Chen, and Shuhong Wang. "Global supply chain integration, financing restrictions, and green innovation." International Journal of Logistics Management 29, no. 2 (May 14, 2018): 539–54. http://dx.doi.org/10.1108/ijlm-03-2017-0072.
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Purpose The purpose of this paper is to analyze the influence that the financial restrictions of Chinese enterprises exert on their green innovation abilities with their increased integration into the global supply chain (GSC). Design/methodology/approach This study uses customs, import, and export data for 222,773 Chinese enterprises and examined them by ownership type, capital density, and degree of pollution. Findings The results show that the deeper the integration into the GSC, the looser the financing environment would be, and the stronger the green innovation abilities of the enterprises. Practical implications The findings suggest that China should step up privatization of state-owned enterprises, increase government subsidies to private enterprises, and loosen their financing restrictions to address the recent economic decline in the country and ensure smooth and fast economic growth. Originality/value This paper is one of the first of its kind to develop and empirically analyze the relationship between the GSC and the financing restrictions and their determinant factors in China. It uniquely contributes to help the authors find approaches to constructing China’s green innovation and has far-reaching implications for other developing countries.
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NO, SUYEON, and JOOYOUNG KWAK. "Building Global Brands for Chinese Private-Owned Enterprises: Strategic Paths to Upgrade the Value Chain." Issues & Studies 54, no. 02 (June 2018): 1850003. http://dx.doi.org/10.1142/s1013251118500030.
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While most private-owned enterprises (POEs) in China are engaged in subcontracting or do not own the product brands, the number of POEs with their own brands has increased rapidly, while some are even globally recognized. Since these POEs face high opportunity costs for own branding, given their dominant presence in the global subcontracting community, their own branding actions require contextual understanding of doing business in China. This study starts with the notion of how these POEs shift from subcontracting to own branding, and explores their respective own branding paths. We interviewed seven Chinese POEs in the fashion industry in Zhejiang Province: Babei, Baili, Sunrise, Aokang, Youngor, Kangnai, and JNBY. The case studies suggest how these firms built their brands in the global market, and why their trajectories differentiated in the course of own branding. Our study configures three types of own brand models for POEs: the competitive subcontracting, the toehold, and the home-linked organic models. POEs can continue subcontracting in their core business, while implementing own branding through diversification. Alternatively, they can segregate markets, pursuing own branding in one group of countries, while subcontracting elsewhere. In addition, they may establish wholly owned enterprises, and introduce their brands in a way that preserves their home market advantages. We identify two stimuli for Chinese POEs’ global branding choices. Global branding strengthens domestic position as it becomes a signal for reputation. As the online platform reduces costs for global branding, and becomes popular, POEs are more likely to pursue global branding to become more competitive in the domestic market. Many POEs also continue to collaborate with the previous customers through strategic inter-dependence, such as distribution channel exchange.
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Qin, Zhong, and Wenli Cheng. "Guanxi and evolving ownership structures in Chinese private enterprises." Corporate Ownership and Control 10, no. 4 (2013): 71–85. http://dx.doi.org/10.22495/cocv10i4art6.
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This paper develops a theoretical model to study features of the evolving ownership structures of private enterprises in Zhejiang Province, China. The model predicts that in a developing economy where the market environment is immature or unstable, the ownership structure of a typical private enterprise involves a cooperative arrangement between a party with management skills and another party with Guanxi (connections). As the market environment becomes more stable, the ownership share of the party with management skills increases. This result is confirmed by empirical evidence of 296 surveyed firms in Ningbo city of China, showing that the perceived importance of both government and family Guanxi declined with perceived improvements in market stability.
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Bai, Tao, Stephen Chen, and Youzong Xu. "Formal and informal influences of the state on OFDI of hybrid state-owned enterprises in China." International Business Review 30, no. 5 (October 2021): 101864. http://dx.doi.org/10.1016/j.ibusrev.2021.101864.
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Wang, Tawei, and Jia-Lang Seng. "Mandatory Adoption of XBRL and Foreign Institutional Investors' Holdings: Evidence from China." Journal of Information Systems 28, no. 2 (April 1, 2014): 127–47. http://dx.doi.org/10.2308/isys-50789.
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ABSTRACT This paper investigates the association between the mandatory adoption of the eXtensible Business Reporting Language (XBRL) in China and foreign institutional investors' interest. Based on a sample from the Shanghai Stock Exchange and the Shenzhen Stock Exchange in the period from 2004 to 2009, our results demonstrate that the adoption of XBRL is positively related to foreign institutional investors' holdings. In addition, although state-owned enterprises (SOEs), compared to non-SOEs, have fewer foreign institutional investors' holdings in our sample period, the adoption of XBRL reduces such differences for non-tradable shares. As China is one of the world's largest and growing economic entities and an early adopter of XBRL, our findings shed light on the role played by XBRL as a global standard and how it facilitates business information exchange around the world.
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Situ, Hui, Carol A. Tilt, and Pi-Shen Seet. "The Influence of the Government on Corporate Environmental Reporting in China: An Authoritarian Capitalism Perspective." Business & Society 59, no. 8 (July 28, 2018): 1589–629. http://dx.doi.org/10.1177/0007650318789694.
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This study uses panel data to investigate the different roles of the Chinese government in influencing companies’ decision making about corporate environmental reporting (CER) via a two-stage process. The results show that the Chinese government appears to mainly influence the decision whether to disclose or not, but has limited influence on how much firms disclose. The results also show that the traditional model of authoritarian capitalism (under which state-owned enterprises [SOEs] are the major governance arrangement) is transforming into a new model. In the new model of authoritarian capitalism, the Chinese government uses newer, more sophisticated tools to manage both state-owned and non–state-owned companies. In addition, these new governance arrangements appear to be more efficient than the traditional model. The findings of this study have implications for both the Chinese government and for Chinese companies, as well as making important contributions to the literature and knowledge of CER in China.