The liability of opaqueness: State ownership and the likelihood of deal completion in international acquisitions by Chinese firms

2018 ◽  
Vol 40 (2) ◽  
pp. 303-327 ◽  
Author(s):  
Jiatao Li ◽  
Peixin Li ◽  
Baolian Wang
Keyword(s):  
State Ownership ◽  
International Acquisitions ◽  
Chinese Firms ◽  
Deal Completion

The State as a Vehicle of Technological Change: Economic Openness, Technological Catching-up, and Indigenous Innovation in Chinese Firms

2018 ◽  
Vol 17 (4) ◽  
pp. 373-407
Author(s):  
Junmin Wang
Keyword(s):  
State Ownership ◽  
The State ◽  
Global Integration ◽  
Chinese Firms ◽  
Catching Up ◽  
Firm Innovativeness ◽  
Absorptive Capacities ◽  
Indigenous Innovation ◽  
Negative Role ◽  
Local Firms

AbstractThe global integration of capital and technology generates a pressing debate on how technologically backward countries can benefit fromFDI, and catch up technologically. This study identifies the mechanisms in the triangle of globalization-state-firm accounting for firms’ indigenous innovations. Specifically, I test three types of the state’s roles—the state’s infrastructure-building, partnership with the firm, and direct intervention into firm governance, combined withFDIspillovers and local firms’ absorptive capacity, in shaping local firms’ innovativeness in a national dataset of Chinese firms. I find that during Chinese firms’ initial technological take-off, the state helped enhance local firms’ indigenous innovativeness through its infrastructure-building and various partnerships with the firms. All three types of the state’s roles are found to positively modulate the firms’ absorptive capacities in affecting their innovativeness. The state’s infrastructure-building and the firm’s state ownership helped weaken the negative role of someFDI-related effects in influencing firm innovativeness.

State Ownership and Earnings Management around Initial Public Offerings: Evidence from China

2015 ◽  
Vol 14 (2) ◽  
pp. 89-116 ◽  
Author(s):  
C. S. Agnes Cheng ◽  
Jing Wang ◽  
Steven X. Wei
Keyword(s):  
Earnings Management ◽  
Path Analysis ◽  
Initial Public Offerings ◽  
Equity Markets ◽  
State Ownership ◽  
Bank Loans ◽  
Chinese Firms ◽  
Public Offerings

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.

Investor perceptions of the benefits of political connections

2014 ◽  
Vol 10 (3) ◽  
pp. 312-331 ◽  
Author(s):  
Fan Yang ◽  
Craig Wilson ◽  
Zhenyu Wu
Keyword(s):  
Foreign Currency ◽  
State Ownership ◽  
Policy Implications ◽  
Political Connections ◽  
Short Sales ◽  
Government Ownership ◽  
Chinese Firms ◽  
Content Type ◽  
A Share

Purpose – The purpose of this paper is to investigate how foreign and domestic investors differ in their beliefs about the relative merits of a firm's political connections. Design/methodology/approach – These differences are employed to explain cross-sectional variation in the previously documented premium in A-share prices relative to otherwise equivalent foreign currency denominated B-shares for Chinese firms. Findings – Chinese domestic individual investors were excluded from owning B-shares of Chinese firms prior to February 20, 2001. The authors find that firms with more political connections have higher premiums and a smaller reduction in premiums associated with this event. Research limitations/implications – This is consistent with domestic block holders deriving additional benefits from politically connected firms. Practical implications – The findings also have important policy implications by showing that government can have a strong effect on the economy even without applying macro-policy tools. Social implications – Government ownership in listed companies can result in discrepancies among classes of investors with respect to their valuations. Furthermore, the prohibition of short sales prevents arbitrage from correcting this bias, and eventually the role of the market in allocating resources efficiently is undermined. Originality/value – The authors investigate the role of political connections as implied by the proportion of state ownership in explaining the A-share premium. Unlike previous studies that associate state ownership with political risk, the paper relates state ownership to political connections that are particularly beneficial to domestic large block shareholders. This interpretation is consistent with the findings and with previous literature on state ownership and political connections of Chinese firms.

scholarly journals Capital Structure of Chinese Firms Across different Sectors: Does Ownership Structure Matter?

2019 ◽  
Vol IV (II) ◽  
pp. 70-82
Author(s):  
Muhammad Yusuf Amin ◽  
Amanat Ali ◽  
Bashir Khan
Keyword(s):  
Capital Structure ◽  
Ownership Structure ◽  
Positive Association ◽  
State Ownership ◽  
Negative Association ◽  
The Other ◽  
Chinese Firms ◽  
Factors Affecting ◽  
Metal Products ◽  
Equipment Size

This study estimates the effect of state ownership and other firmspecific variables on the capital structure of Chinese listed industries operating in different sectors. State ownership and leverage are both negatively and positively associated. The negative association of state ownership with leverage was found in construction, metals and metal products, services and transport sectors, while positive association was found in chemical, rubber, plastic & non-metallic products and machinery & other equipment. Size and profitability are the other most prominent factors affecting capital structure of the firms across different sectors in China. Hence, this study shows that in addition to other firm specific variables, ownership structure also determines capital structure of Chinese firms.

scholarly journals State ownership in publicly listed Chinese firms and its performance

2010 ◽  
Vol 7 (3) ◽  
pp. 387-401 ◽  
Author(s):  
Ji Li ◽  
Guiyao Tang ◽  
Amy YY Chen ◽  
Nick M. Yan
Keyword(s):  
Organizational Behavior ◽  
Empirical Data ◽  
Empirical Test ◽  
State Ownership ◽  
Manufacturing Industries ◽  
Chinese Firms ◽  
Research Findings ◽  
Specific Factors ◽  
The Relationship ◽  
Practical Implications

Based on research, we studied the state ownership in publicly listed Chinese firms, and develop an empirical test of the relationship between state ownership and firm performance. We demonstrate the importance of some unique Chinese factors to understanding organizational behavior in China. The study indicates that the predictive validity of Western theories could be improved by taking into account the effects of fief-specific factors. We propose hypotheses that are relevant to this issue, and test them with empirical data collected from formerly state-owned firms in China’s manufacturing industries. The results support the hypothesized effects of fief-specific factors. The paper concludes with a discussion of the theoretical and practical implications of the research findings.

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