Title

An Anatomy of State Control in the Globalization of State-Owned Enterprises

Publication Type

Journal Article

Publication Date

7-2014

Abstract

Integrating agency theory with institutional analysis in international business, we propose a state-control perspective to analyze government-control mechanisms in emerging economies’ globalization of state-owned enterprises (SOEs). We identify two types of state control that influence SOEs’ globalization decisions and the degree of globalization: state ownership control and executives’ political connections, both of which are contingent upon the home country’s evolving institutional environments. Using a two-step corporate globalization decision model and 17,272 firm-year observations of non-financial, Chinese-listed companies, we find a strong impact of both types of state control on SOEs’ globalization, although the impacts differ between the periods before and after domestic governance reform and across different globalization-decision steps. The diminishing impact of executives’ political connections and the increasing impact of state ownership control on firms’ degree of globalization demonstrate the evolving relationship between the state and the managers, as well as the dynamics of state control in globalizing SOEs.

Keywords

Agency theory, state control, state ownership, political connections, state-owned enterprises, corporate globalization.

Discipline

Asian Studies | Corporate Finance | Economic Policy

Research Areas

Finance

Publication

Journal of International Business Studies

Volume

46

First Page

223

Last Page

240

ISSN

0047-2506

Identifier

10.1057/jibs.2014.35

Publisher

Palgrave Macmillan

Additional URL

http://dx.doi.org/10.1057/jibs.2014.35

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