Performance Differential between Private and State-owned Enterprises: An Analysis of Profitability and Solvency

Phi, Nguyet Thi Minh; Taghizadeh–Hesary, Farhad; Tu, Chuc Anh; Yoshino, Naoyuki; Kim, Chul Ju

doi:10.1080/1540496x.2020.1809375

Cited by 18 publications

(9 citation statements)

References 29 publications

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“…Our findings show that institutional quality boosts FP. This finding is in agreement with Phi et al, 2021 andYasar et al, 2011 who demonstrated that a rise in institutional quality may aid in the expansion of businesses.…”

Section: Discussionsupporting

confidence: 92%

Environmental performance and financial performance during COVID-19 outbreak: Insight from Chinese firms

Kaakeh

Gökmenoğlu²

2022

Front. Environ. Sci.

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The global pressure to reduce carbon emissions on high-carbon-emitting economies has intensified significantly in recent years. However, these efforts’ effect on the firm’s financial performance (FP) has been a major concern. This research investigates the relationship between environmental performance (EP) and FP of Chinese firms considering the effect of the COVID-19 outbreak. Data was collected from Refinitiv DataStream and span the period of 2017–2020. In addition to the fixed-effects regression, the novel dynamic panel bootstrap corrected fixed effects and panel corrected standard errors methods were utilized to test the hypotheses. Obtained results revealed two key findings. First, there is weak evidence that higher EP increases firms’ FP. Second, the relationship between EP and FP is positive in times of economic distress, meaning that firms must continue investing in environmentally ethical and sustainable projects during the crisis. Our empirical findings extend the existing literature by showing that even in times of crisis, such as COVID-19, an environmentally friendly business model positively affects the firm’s financial structure. We discuss the policy recommendations implied by our findings for investors, business owners, managers, and officials in the conclusion section.

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Section: Discussionsupporting

confidence: 92%

Environmental performance and financial performance during COVID-19 outbreak: Insight from Chinese firms

Kaakeh

Gökmenoğlu²

2022

Front. Environ. Sci.

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“…It is evident that SOEs have already implemented CSR in many aspects of local operations and may not need further social investments in the international market. Second, it is evident that non-SOEs are more profitable than their counterparts and that their financial strength is based on equity rather than debt [91]. Thus, when they internationalize, they prefer large markets and low-risk-profile locations, where it is easy to generate higher economic returns [92].…”

Section: Discussionmentioning

confidence: 99%

Environmental, Social and Governance Performance of Chinese Multinationals: A Comparison of State- and Non-State-Owned Enterprises

et al. 2021

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The purpose of this research is to empirically investigate the effect of internationalization on the environmental, social, and governance (ESG) performance of Chinese state-owned enterprises (SOEs) and non-SOEs. The study employed an updated panel dataset (6238 firm-year observations) of Chinese multinationals from the period 2010–2019. The initial findings of the study reveal that Chinese multinationals perform better in terms of environmental and governance scores. It suggests that international market forces deal with enhancing ecological problems and concerns of stakeholders. However, results are insignificant when the social performance of multinationals is analyzed. On the other hand, multinational non-SOEs outperformed their counterparts in terms of environmental and governance performance. The findings of the paper are robust regarding the use of proxies of internationalization and endogeneities.

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“…Corporate governance, external supervision, and the relationship between firms and the government are important factors that affect firms' idiosyncratic risk. High governance, strong external supervision mechanisms, and the nature of state-owned firms help in reducing firms' idiosyncratic risk (Ferreira and Laux, 2007;Abad and Robles, 2014;Chen and Liu, 2019;Phi et al, 2020). Based on the above three factors, we speculate that the impact of ECSR on idiosyncratic risk has heterogeneity under different conditions.…”

Section: Hypothesis Developmentmentioning

confidence: 92%

Can Environmental Corporate Social Responsibility Reduce Firms’ Idiosyncratic Risk? Evidence From China

Kong

Pan

Sun

et al. 2020

Front. Environ. Sci.

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Environmental corporate social responsibility (ECSR) can be a strategy to increase the transparency of investment information effectively to alleviate information asymmetry. The purpose of this article is to examine the impact of ECSR on firms’ idiosyncratic risk. Using the data of A-share listed firms in China and data of Rankins CSR Ratings by developing econometrics models, this study documents that ECSR can significantly reduce the firms’ idiosyncratic risk. This result perpetuates after a series of robustness checks. Besides, the results of conditional analyses reveal that the effect of ECSR is more pronounced for state-owned firms and firms with weaker external monitoring mechanisms and low internal control. Moreover, further evidence suggests that firms with high ECSR show a greater tendency to disclose more information, which reduces the information asymmetry and offers linkages from ESCR to firms’ idiosyncratic risk.

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Performance Differential between Private and State-owned Enterprises: An Analysis of Profitability and Solvency

Cited by 18 publications

References 29 publications

Environmental performance and financial performance during COVID-19 outbreak: Insight from Chinese firms

Environmental performance and financial performance during COVID-19 outbreak: Insight from Chinese firms

Environmental, Social and Governance Performance of Chinese Multinationals: A Comparison of State- and Non-State-Owned Enterprises

Can Environmental Corporate Social Responsibility Reduce Firms’ Idiosyncratic Risk? Evidence From China

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