State‐owned Enterprises, Inequality, and Political Ideology

Avsar, Veysel; Karayalçın, Cem; Ulubaşoğlu, Mehmet

doi:10.1111/ecpo.12017

Cited by 14 publications

(7 citation statements)

References 51 publications

(76 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…A large literature examines empirically whether state ownership of domestic corporate equity is associated with increased or reduced firm value, and most of these studies conclude that government stockholdings tend to correlate with lower firm market values (Boubakri and Cosset, 1998;Chen, Schipper, Xu and Xue, 2012;Lin and Bo, 2012). The findings of this literature offer more support for the "political view" that state ownership is engineered to redistribute corporate wealth to connected groups and individuals (Megginson, Nash, van Randenborgh, 1994;Sapienza, 2004;Dinç, 2005;Avsar, Karayalcin, Ulubasoglu, 2013;Iannotta, Nocera, Sironi, 2013;Acharya, Anginer, Warburton, 2013) than the competing "social view," which attributes socially benign intentions to state investors.…”

Section: How State Ownership Itself Should Impact Firm Valuesmentioning

confidence: 91%

Rise of the Fiduciary State: A Survey of Sovereign Wealth Fund Research

Megginson

Fotak

2015

Journal of Economic Surveys

View full text Add to dashboard Cite

We survey the literature documenting the rise of sovereign wealth funds (SWFs), which, with assets under management of over $5.4 trillion at year‐end 2014, are a major force in global finance. Research papers have analyzed the evolution of SWFs from stabilization funds to stand‐alone wealth management funds; we both survey this research and show that more than 25 countries have launched or proposed new SWFs since January 2008. The most salient and controversial feature of SWFs is that they are state‐owned; we survey the existing literature on state ownership and discuss what this predicts about the efficiency and beneficence of government control of SWF assets. We discuss the documented importance of SWF funding sources (oil sales revenues versus excess reserves from export earnings) and survey the normative literature describing how SWFs should allocate funds. We then summarize the empirical literature studying how SWFs actually do allocate funds—across asset classes, geographically, and across industries. We document that most SWF equity investments in publicly traded firms involve cross‐border purchases of sizeable minority stakes (median around 20%) in target firms, with a strong preference for investments in the financial sector. Next, we assess empirical studies examining the impact of SWF stock investments on target firm financial and operating performance, and find universal support for a positive announcement period stock price increase of 1–3%. This, however, is significantly lower than the 5% abnormal return documented for stock purchases by comparable privately owned financial investors in recent studies, indicating a “sovereign wealth fund discount.” We conclude by summarizing the lessons of SWF research and pointing out unresolved issues.

show abstract

Section: How State Ownership Itself Should Impact Firm Valuesmentioning

confidence: 91%

Rise of the Fiduciary State: A Survey of Sovereign Wealth Fund Research

Megginson

Fotak

2015

Journal of Economic Surveys

View full text Add to dashboard Cite

show abstract

“…Left-wing governments are thus associated with lower unemployment rates (Hibbs, 1977) and higher minimum wages (Saint-Paul, Bean, & Bertola, 1996), which implies greater cost stickiness for all firms due to the labor-friendly policies. Nevertheless, the effect of left-wing governments on labor cost stickiness should be more evident in SOEs, because these governments tend to use their SOEs as a tool to achieve broader political goals (Avsar, Karayalcin, & Ulubasoglu, 2013), such that SOEs are subject to more intense intervention. For example, to support their political agenda, left-wing governments likely instruct SOEs not to fire employees or reduce their compensation even when sales decline.…”

Section: Labor Cost Stickiness In Soes and Socio-political Variablesmentioning

confidence: 99%

State Ownership, Socio-political Factors, and Labor Cost Stickiness

Prabowo

Hooghiemstra

Veen-Dirks

2017

European Accounting Review

View full text Add to dashboard Cite

This article examines the effect of state ownership on the labor cost stickiness of firms in 22 European countries. States are more likely to interfere in the decision-making processes of state-owned enterprises (SOEs) and demand firm activities that are desirable from a socio-political perspective. For example, to win political support, politicians may instruct SOEs to avoid layoffs to minimize unemployment rates. The varied objectives of SOEs also make it more difficult to control managers' behavior, leaving more room for managerial discretion and the pursuit of self-interests through empire-building behavior. Both state intervention and managerial self-interest restrain managers from laying off employees or reducing employee wages when sales decrease, which may lead to greater labor cost stickiness. Data from 1993 to 2012 reveal that SOEs exhibit greater labor cost stickiness than private firms, and their labor cost stickiness also varies predictably with socio-political variables such as election years and left-wing governments.

show abstract

“…Reforms following economic crisis and increase in public debt have led to new institutional arrangements for the delivery of public services around the world. As a result the number of SOEs and the importance of their economic transactions are increasingly significant in many countries (OECD, 2011;Bruton et al, 2015;Aharoni, 1981;Avsar et al, 2013;Millward, 2011). The proportion of SOEs among the Fortune Global 500 has grown from 9 per cent in 2005 to 23 per cent in 2014 (PWC, 2015).…”

Section: Proving the Relevance Of The Research Fieldmentioning

confidence: 99%

Corporate governance and accountability of state-owned enterprises

Grossi

Papenfuß

Tremblay

2015

Intl Jnl Public Sec Management

152

View full text Add to dashboard Cite

Purpose – The purpose of this paper is to introduce the special issue and outline its major themes and challenges, their relevance and the research opportunities the field presents. Design/methodology/approach – The paper reviews prior literature and outline’s the need to analyse challenges for corporate governance and accountability of state-owned enterprises (SOEs) as a precursor to introducing the contributions to this special issue. Findings – Corporate governance, accounting and accountability of SOEs are crucial and growing topics in public management and other research disciplines. Public service provision and budget consolidation cannot be realized effectively and efficiently without powerful governance and management of SOEs. However there are significant corporate governance challenges and important empirical research gaps in comparison to other fields. Broader theoretical perspectives, methodological approaches, accountability mechanisms and sector/context are identified and discussed and encouraged in future research. Research limitations/implications – This paper aims to stimulate interdisciplinary research on emerging issues affecting governance and accountability of SOEs considering their growing importance in the society and their changing nature. Practical implications – Effective mechanisms and good practices may contribute to better performance of SOEs. Findings may help politicians, administrations, board members, auditors, consultants, scholars and the media striving for improvements around the world. Originality/value – The paper condenses theoretical and empirical findings to highlight the relevance of this field and important research gaps. The special issue offers an empirical examination of interdisciplinary literature and innovative experiences of SOEs to strengthen public service motivation, board composition and roles, trust and control, transparency, public value and to enhance the ability to manage, steer and monitor contracts, performance and relationships.

show abstract

State‐owned Enterprises, Inequality, and Political Ideology

Cited by 14 publications

References 51 publications

Rise of the Fiduciary State: A Survey of Sovereign Wealth Fund Research

Rise of the Fiduciary State: A Survey of Sovereign Wealth Fund Research

State Ownership, Socio-political Factors, and Labor Cost Stickiness

Corporate governance and accountability of state-owned enterprises

Contact Info

Product

Resources

About