We are the (National) Champions: Understanding the Mechanisms of State Capitalism in China

Lin, Li-Wen; Milhaupt, Curtis J.

doi:10.2139/ssrn.1952623

Cited by 85 publications

(78 citation statements)

References 5 publications

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“…The 200 firms in CSI SOE 200 are the largest 200 state-owned firms among all the public A-share companies listed on the Shanghai or Shenzhen stock exchanges. A firm is defined as a SOE if the ultimate controller is the central or local government, (Note 2) and the government could control the firms via the SASAC, the parent company of the public firms, or other SOEs (Lin & Milhaupt, 2013). The 200 firms in CSI POE 200 are the 200 privately owned firms with the largest market capitalization and liquidity of all the publicly traded A-share companies listed on the Shanghai or Shenzhen stock exchanges.…”

Section: Samplementioning

confidence: 99%

Earnings Management, Politically Connected CEOs, and Politically Connected Independent Board Members: Evidence from China

Hong¹

2017

ijafr

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This study investigates whether Chinese firms' earnings management behaviors vary systematically with politically connected CEOs and studies the association between Chinese firms' earnings management behaviors and the presence of politically connected independent board members. We find that firms with politically connected CEOs engage in less real earnings management, probably because their political connections make raising capital easier and reduce incentives for earnings management. However, this relationship is weaker in State-Owned Enterprises (SOEs) than in non-SOEs. In addition, we find that politically connected independent board members have significant negative impacts on real earnings management in non-SOEs, suggesting the independent directors with political ties could mitigate real earnings management.

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Section: Samplementioning

confidence: 99%

Earnings Management, Politically Connected CEOs, and Politically Connected Independent Board Members: Evidence from China

Hong¹

2017

ijafr

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“…for private companies or the fact that controlling shareholders have disproportionate pecuniary and nonpecuniary benefits from running the firm (Barclay and Holderness, 1989;Claessens, Djankov and Lang, 2000;Dyck and Zingales, 2004;Lin and Milhaupt, 2011;Nenova, 2005). In private firms, it is easier to understand what the "private benefits of control" entail.…”

Section: Fiscal Extraction From Soes or The Public Benefits Of Contromentioning

confidence: 99%

“…Holding companies also have the advantage of an internal capital market, which can serve to use surpluses from some firms to help finance the capital expansion of other enterprises when those projects are evaluated as profitable. Having such internal capital markets can also help state-owned business groups protect affiliated firms from industry or firm-specific shocks (Khanna and Yafeh, 2007;Lin and Milhaupt, 2011).…”

Section: Advantages Of the State-owned Holding Companymentioning

confidence: 99%

State-Owned Enterprise Reform in Latin America: Issues and Possible Solutions

Musacchio

Pineda

García

2015

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work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/ licenses/by-nc-nd/3.0/igo/legalcode) and may be reproduced with attribution to the IDB and for any noncommercial purpose. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. AbstractThis paper examines the challenges governments in Latin America face to control their state-owned enterprises (SOEs). It argues that, absent privatization, governments can rely on a variety of reforms to address some of the main problems affecting SOEs. These problems are divided into corporate governance problems-which include agency and multiple-principals problems-and the fiscal governance problem, which has to do with the discretionary nature of the fiscal relationship between the government and its enterprises. Then the paper discusses a variety of solutions for each of these problems. Rather than providing a single recipe, it argues that governments can design governance mechanisms that rely on the market (e.g., by partially privatizing a firm and listing it on a stock exchange), on ex-ante administrative controls, or on hybrid solutions that combine both. Thus, the paper argues that the mechanisms to deal with the problems of SOEs have to be designed on a case-by-case basis, taking into account the specific problems of the public enterprise in question and the economic (and political) environment affecting it.JEL Codes: H11, H50, H77, G30

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“…From this theoretical perspective the Chinese pattern of decentralised experimentation and innovation bears close resemblance to key features of the venture capital model as practiced in the United States (Lin and Milhaupt, 2011 intends to play a key strategic role in supporting the high-technology development and innovation of its domestic firms in sectors where the risk of investment is high -it also intends to do this in a way that responds to the need for collaborative behaviour and system integration at a global level.…”

Section: Technological Development Alliance Capitalism and Chinese Smentioning

confidence: 97%

China’s New Alliance Capitalism and the Case of the Wireless Communication Sector

Higgins

2015

Alliance Capitalism, Innovation and the Chinese State

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This thesis seeks to explore how key 'ecological' or 'systems integration' technical pressures such as the co-production of technology, the emergence of new "collaborative intellectual property (IP) mechanisms", and the increasing use of collaborative alliances for market and product development are impacting on and shaping the socio-technical policy directives of Chinese state leaders and the strategic behaviour of key Chinese high-technology firms operating in the global wireless sector.The central theoretical focus of this thesis is the emergence of alliance capitalism as an important new form of economic organisation with specific theoretical focus on the role of governmental authorities in both facilitating and governing the parameters of global technological alliances and market construction. The value of this thesis is that it highlights how the government of China and its domestic firms have recently adjusted to socio-technological systems change and the changing nature of the global technological environment and revised their technological development strategies to incorporate the notion of alliance capitalism. It will highlight how alliance capitalism is built around reciprocal interdependence and signifies a fundamental shift in the organisational behaviour of the Chinese government and its domestic firms. Beyond China's earlier FDI and techno-nationalist strategies, this new development strategy can be seen as the third major attempt to mount an effective industrial strategy in China. Specifically, it responds to socio-technological systems change in a way that seeks to reconcile the New Left's techno-nationalistic ambition to build an indigenous technology base characterised by the creation and ownership of technological standards and proprietorial ideas with the liberal desire to utilise the contemporary globalisation process as a mechanism to facilitate economic growth and technological up-scaling. It is essentially a third way whereby the state's strategic control over the globalisation process is modified in a way that still allows it a certain degree of control over the developmental process itself, but in which the existence of critical globalised ecosystem dependencies and the interests of global firms are actually integrated into the Chinese developmental strategy.ii

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We are the (National) Champions: Understanding the Mechanisms of State Capitalism in China

Cited by 85 publications

References 5 publications

Earnings Management, Politically Connected CEOs, and Politically Connected Independent Board Members: Evidence from China

Earnings Management, Politically Connected CEOs, and Politically Connected Independent Board Members: Evidence from China

State-Owned Enterprise Reform in Latin America: Issues and Possible Solutions

China’s New Alliance Capitalism and the Case of the Wireless Communication Sector

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