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.
Agency theory, state control, state ownership, political connections, state-owned enterprises, corporate globalization.
Asian Studies | Corporate Finance | Economic Policy
Journal of International Business Studies
LIANG, Hao; REN, Bing; and SUN, Sunny Li.
An anatomy of state control in the globalization of state-owned enterprises. (2015). Journal of International Business Studies. 46, (2), 223-240. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/4878
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