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Article: Unfolding China’s state-owned corporate empires and mitigating agency hazards: Effects of foreign investments and innovativeness

TitleUnfolding China’s state-owned corporate empires and mitigating agency hazards: Effects of foreign investments and innovativeness
Authors
KeywordsEmpire building
Agency hazards
Institutional theory
State-ownershipInnovativeness
Foreign capital
Issue Date2019
PublisherPergamon. The Journal's web site is located at http://www.elsevier.com/locate/jwb
Citation
Journal of World Business, 2019, v. 54 n. 3, p. 191-212 How to Cite?
AbstractIntegrating agency and institutional perspectives, we describe how China’s socio-political institutions create state-owned corporate empires with unique agency conflicts. We develop a framework demonstrating how economically unjustified firm expansion, i.e. empire building, mediates the relationship between state ownership and performance. We uncover the instrument in empire building and appropriate corporate governance and strategic management remedies. An empirical study on 29,638 Chinese firms evidences that (1) increased state ownership drives higher management expenses and lower firm profitability though empire building; (2) long-term debt is used to finance empire building; and (3) foreign capital investments and innovativeness can mitigate these agency conflicts.
Persistent Identifierhttp://hdl.handle.net/10722/279002
ISSN
2017 Impact Factor: 3.993
2015 SCImago Journal Rankings: 1.656

 

DC FieldValueLanguage
dc.contributor.authorZhu, J-
dc.contributor.authorTse, CH-
dc.contributor.authorLi, X-
dc.date.accessioned2019-10-21T02:17:49Z-
dc.date.available2019-10-21T02:17:49Z-
dc.date.issued2019-
dc.identifier.citationJournal of World Business, 2019, v. 54 n. 3, p. 191-212-
dc.identifier.issn1090-9516-
dc.identifier.urihttp://hdl.handle.net/10722/279002-
dc.description.abstractIntegrating agency and institutional perspectives, we describe how China’s socio-political institutions create state-owned corporate empires with unique agency conflicts. We develop a framework demonstrating how economically unjustified firm expansion, i.e. empire building, mediates the relationship between state ownership and performance. We uncover the instrument in empire building and appropriate corporate governance and strategic management remedies. An empirical study on 29,638 Chinese firms evidences that (1) increased state ownership drives higher management expenses and lower firm profitability though empire building; (2) long-term debt is used to finance empire building; and (3) foreign capital investments and innovativeness can mitigate these agency conflicts.-
dc.languageeng-
dc.publisherPergamon. The Journal's web site is located at http://www.elsevier.com/locate/jwb-
dc.relation.ispartofJournal of World Business-
dc.subjectEmpire building-
dc.subjectAgency hazards-
dc.subjectInstitutional theory-
dc.subjectState-ownershipInnovativeness-
dc.subjectForeign capital-
dc.titleUnfolding China’s state-owned corporate empires and mitigating agency hazards: Effects of foreign investments and innovativeness-
dc.typeArticle-
dc.identifier.emailLi, X: xuli1@hku.hk-
dc.identifier.authorityLi, X=rp01615-
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1016/j.jwb.2019.02.001-
dc.identifier.scopuseid_2-s2.0-85061629904-
dc.identifier.hkuros308018-
dc.identifier.volume54-
dc.identifier.issue3-
dc.identifier.spage191-
dc.identifier.epage212-
dc.publisher.placeUnited Kingdom-

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