Do Political Connections Help Privately Owned Chinese Enterprises Go Global?

2017 ◽  
Author(s):  
Denis Schweizer ◽  
Thomas John Walker ◽  
Aoran Zhang
Keyword(s):  
Political Connections ◽  
Chinese Enterprises ◽  
Privately Owned

Technological innovation policy and Chinese heterogeneity enterprises' outward foreign direct investment

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jinjing Zhao ◽  
Jongchul Lee
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Innovation Policy ◽  
Local Economy ◽  
Outward Foreign Direct Investment ◽  
Central State ◽  
Chinese Enterprises ◽  
Content Type ◽  
Privately Owned

PurposeThe study aims to analyze the role of the Made in China 2025 (MIC2025) initiative in China's Outward Foreign Direct Investment (OFDI) and the factors affecting the success or failure of Chinese enterprises' OFDI from the perspectives of the heterogeneity of home country enterprises.Design/methodology/approachBased on data on China's OFDI obtained from the China Global Investment Tracker (CGIT), the study uses the difference-in-differences model to analyze 2,670 completed OFDI deals and 211 failed OFDI deals by Chinese enterprises, from 2009 to 2018.FindingsThe study found that the effect of MIC2025 on Chinese enterprises' OFDI varies according to the ownership structure of the home country's enterprises. For successful OFDI, MIC2025 significantly impacted central state-owned enterprises (CSOEs), while it did not significantly influence local SOEs and privately owned enterprises. For failed OFDI, the MIC2025 plan only increased the failure of CSOEs' OFDI for the technology-seeking motivation in high-income host countries. Further, the investment options of local SOEs differ from those of CSOEs. Considering their aim to drive the local economy and seek profits, they are more similar to those of privately owned enterprises.Originality/valueThis study used a new database (i.e. the CGIT) to analyze Chinese enterprises' OFDI. It discussed the role of MIC2025 for different enterprises from the perspectives of successful and failed OFDI. It thus provided a new basis for analyzing policy affecting the OFDI of Chinese enterprises.

scholarly journals Political Strategy and Market Capabilities: Evidence from the Chinese Private Sector

2015 ◽  
Vol 12 (01) ◽  
pp. 75-102 ◽  
Author(s):  
Nan Jia
Keyword(s):  
Private Sector ◽  
The Political ◽  
Political Strategy ◽  
Legal Systems ◽  
Political Organizations ◽  
Public And Private ◽  
Chinese Enterprises ◽  
Asset Turnover ◽  
Governmental Power ◽  
Privately Owned

ABSTRACTIn this article, I argue that in emerging markets firms' market capabilities are positively related to the political strategies that they employ to reduce the risks of expropriation by public and private entities. I focus specifically on the moderating conditions, including institutional environments that have direct constraint on governmental power, supportive policies that promote private sector growth, and developed legal systems. My empirical analysis utilizes data on privately owned Chinese enterprises. The results show that firms' market capabilities – as indicated by their asset turnover ratios and R&D intensity – are positively related to their likelihood of participating in key policymaking political organizations but this relationship is weaker in provinces that have more effective constraints on governmental power, more supportive policies for private sector growth, and more developed legal systems.

scholarly journals Discretionary Effort on Green Technology Innovation: How Chinese Enterprises Act when Facing Financing Constraints

PLoS ONE ◽  
2021 ◽  
Vol 16 (12) ◽  
pp. e0261589
Author(s):  
Kexian Zhang ◽  
Xiaoying Liu ◽  
Min Hong
Keyword(s):  
Technology Innovation ◽  
Green Technology ◽  
Political Connections ◽  
Social Benefits ◽  
Financing Constraints ◽  
Policy Uncertainty ◽  
Chinese Enterprises ◽  
Discretionary Effort ◽  
Shadow Banks ◽  
The Social

Firm’s effort on Green technology innovation (hereafter, called G-innovation) is affected by financing constraints, and firm will make a discretionary choice according to its own situation, to achieve the maximization of self-interests. Based on the data of Chinese micro enterprises, firstly, we empirically analyze firms’ decision-making towards G-innovation when faced with financing constraints. It supports the view that financing constraints can hinder enterprise technological innovation. And we also make an explanation that the social benefits of green technology innovation are greater than personal benefits, which makes enterprises tend to reduce green technology innovation when facing financing constraints. Then we examine firms’ heterogonous behaviors under different internal attributes and external environments. The results reveal that: First, firms are reluctant to pay more efforts to G-innovation when faced with increased financing constraints. Second, firms with different attributes exhibit heterogeneous G-innovation. Political connections will change firms’ willingness to innovate, while the structure of property rights and the pollution degree will not. Third, firms under different external environment also exhibit heterogeneous G-innovation. When economic policy uncertainty increases, firms’ willingness to innovate weakens. The development of shadow banks fail to improve firm’s willingness to innovate.

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