Impact of state ownership and control mechanisms on the performance of group affiliated companies in China

Lü, Yuan; Yao, Jun

doi:10.1007/s10490-006-9017-0

Cited by 78 publications

(70 citation statements)

References 58 publications

(121 reference statements)

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“…Local government ownership is measured by local SOEs, a dummy variable that is coded one if the firm is state-owned and affiliated at the local level of government (i.e., levels of government affiliation lower than the state level). Government ownership in a firm is often considered as an institutional capital (Luo and Yao 2006). Private ownership is measured by POEs, a dummy variable that is coded one if the firm is privately owned.…”

Section: Methodsmentioning

confidence: 99%

Impact of ownership types on R&D intensity and innovation performance—evidence from transitional China

Teng

2017

Front. Bus. Res. China

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This paper examines the effects of ownership types on firms' R&D intensity and innovation performance, using a sample of 357,857 Chinese firms from 2005 to 2007. This study finds considerable divergence among Chinese domestic enterprises in terms of R&D intensity and innovation performance. We find that firms owned by the central government are the key drivers for firms' R&D activities, while local government, private and foreign ownerships are negatively related to both R&D intensity and innovation performance. This paper finds significant divergence within government ownership category and argues that China's institutional changes generate varied government ownership groups with different levels of resource endowment, which in turn influence firms' R&D activities.

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Section: Methodsmentioning

confidence: 99%

Impact of ownership types on R&D intensity and innovation performance—evidence from transitional China

Teng

2017

Front. Bus. Res. China

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“…As expected, the more entrepreneur-friendly these formal institutional requirements are, the more entrepreneurship flourishes, and the more developed these economies will become -and vice versa (Le, Venkatesh, & Nguyen, 2006;. Another example is research on business groups and conglomerates (Chang, 2006;Chung, 2006;Dieleman & Sachs, 2006;Guillen, 2000;Khanna & Palepu, 2000;Li, Ramaswamy, & Petitt, 2006a;Lu & Yao, 2006;Ma et al, 2006;Peng & Delios, 2006;Ramaswamy et al, 2004;Yiu et al, 2005). 7 Another geographic region that has attracted significant research attention is Central and Eastern Europe.…”

Section: Notesmentioning

confidence: 98%

“…Specifically, strategic choices are not only driven by industry conditions and firm capabilities, but are also a reflection of the formal and informal constraints of a particular institutional framework that managers confront (Bruton, Dess, & Janney, 2007;Carney, 2005;Chelariu, Bello, & Gilliland, 2006;Delios & Henisz, 2000;Hill, 2007;Khanna & Palepu, 2000Lee & Oh, 2007;Lee, Peng, & Barney, 2007;Lu & Yao, 2006;Ma, Yao, & Xi, 2006;Meyer & Nguyen, 2005;Ring et al, 2005;Rodriguez, Uhlenbruck, & Eden, 2005;Teegen et al, 2004;Wan & Hoskisson, 2003;Zhou, Tse, & Li, 2006).…”

Section: Introductionmentioning

confidence: 99%

An institution-based view of international business strategy: a focus on emerging economies

2008

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Leveraging the recent research interest in emerging economies, this Perspective paper argues that an institution-based view of international business (IB) strategy has emerged. It is positioned as one leg that helps sustain the ''strategy tripod'' (the other two legs consisting of the industry-and resource-based views). We then review four diverse areas of substantive research: (1) antidumping as entry barriers; (2) competing in and out of India; (3) growing the firm in China; and (4) governing the corporation in emerging economies. Overall, we argue that an institution-based view of IB strategy, in combination with industry-and resource-based views, will not only help sustain a strategy tripod, but also shed significant light on the most fundamental questions confronting IB, such as ''What drives firm strategy and performance in IB?''

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“…There is little debate on the timing of China's institutional transition: generally, researchers use 1993, the year when China enacted its first corporate law, to divide the institutional transition into the 'prereform era' and the 'reform era' (Aivazian et al, 2005;Meyer and Lu, 2005); more specifically, since 2000 when the modern enterprise system was established nationwide, China is considered to have entered its 'postreform era' (Lu and Yao, 2006).…”

Section: Institutionally Rooted Organizational Evolutionmentioning

confidence: 99%

Diversification and Performance of Group-Affiliated Firms during Institutional Transitions: The Case of the Chinese Textile Industry

Zhang¹

2011

American Journal of Economics and Business Administration

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Problem statement: Business groups play significant roles and evolve with the changing institutional environments in many emerging Asian economies. A study of how the institutional transition and the resultant 'institutionally rooted evolution' of business groups affect the diversification outcomes of affiliated firms will therefore help to deepen our understanding of this unique organizational form. Approach: This study uses the 2001-2005 data on listed firms from the Chinese textile industry and estimates the diversification effects of all firms in the sample and the differences in the diversification effects between group-affiliated firms and their stand-alone counterparts. Results: A positive relationship is found between the listed textile firms' unrelated diversification and their firm value during the period 2001-2005. Furthermore, the results indicate that group affiliation has complicated impacts on the diversification-performance relationship of the listed firms. Although group-affiliated firms are more successful in pursuing unrelated diversification when compared with stand-alone firms, such a difference in performance outcomes is statistically weak (as measured by Tobin's Q). Furthermore, it is found that group-affiliated firms perform related diversification worse than their stand-alone counterparts (as measured by both ROA and Tobin's Q). Conclusion: At late stages of the institutional transition, as in China at present, the dominant influence of institutional environments on the diversification-performance link of firms still works and motivates business groups to evolve organizationally. Such an organizational evolution has complex implications for group-affiliated firms' diversification: the weak performance advantage from unrelated diversification suggests that business groups' organizational evolution may contribute to the persistence of the comparative strength of business groups' internal markets; the concurrent low outcomes from related diversification however suggests that the organizational evolution disrupts the interrelations inside the group unavoidably and therefore hurts the fundamental foundation for the realization of related diversification's value-creation tendency.

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Impact of state ownership and control mechanisms on the performance of group affiliated companies in China

Abstract: Group affiliated companies, State ownership, Diversification, Firm performance,

Cited by 78 publications

References 58 publications

Impact of ownership types on R&D intensity and innovation performance—evidence from transitional China

Impact of ownership types on R&D intensity and innovation performance—evidence from transitional China

An institution-based view of international business strategy: a focus on emerging economies

Diversification and Performance of Group-Affiliated Firms during Institutional Transitions: The Case of the Chinese Textile Industry

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