In many countries governments not only regulate business activities, but also become involved in the corporate governance of individual firms through ownership and board ties. While existing studies usually focus either on benefits of political connections or on costs of government influence, a political embeddedness perspective helps us consider both advantages and constraints associated with ties to the government. In particular, firms with direct ties to the government will experience significant costs associated with government officials' involvement in the corporate governance process. In contrast, firms with ties to state-owned enterprises (SOEs) are connected to the government indirectly and thus, while getting access to state-owned resources, avoid costs associated with the government's interventions. This study compares the performance consequences of board and ownership ties to the government with the consequences of board and ownership ties to SOEs. I find that ties to SOEs are associated with higher profitability, while no significant differences are discovered for firms with direct ties to the government. Copyright (c) 2009 Blackwell Publishing Ltd and Society for the Advancement of Management Studies.

T his paper is concerned with organizational response to institutional pressure. We argue that when faced with externally imposed standards, organizations can sometimes respond by developing alternative standards for the same practices. This "substitution response" can shift the attention of stakeholders away from noncompliance with the original standards to adherence to the alternative standards. Empirically, we examine organizational response to the introduction of a governmentsponsored but nonmandatory corporate governance code. Unable to comply with all of the requirements of this very specific and demanding code, many firms responded by developing their own internal corporate governance codes. We predict and show that adoption of these internal codes is driven by the visibility of a firm's corporate governance practices and by mimetic forces. We also find that internal governance codes differ in their degree of ceremoniality and that ceremoniality is inversely related to organizational dependence on stakeholders who value good corporate governance. These findings help us to understand when organizational responses to institutional pressure take a ceremonial as opposed to substantive form.

Manuscript type: ReviewResearch Question/ Issue: Which forms of state control over corporations have emerged in countries that made a transition from centrally-planned to marked-based economies and what are their implications for corporate governance? We assess the literature on variation and evolution of state control in transition economies focusing on corporate governance of statecontrolled firms. We highlight emerging trends and identify future research avenues.Research Findings/ Insights: Based on our analysis of more than a hundred articles in leading management, finance and economics journals since 1989, we demonstrate how research on state control evolved from a polarized approach of public -private equity ownership comparison to studying a variety of constellations of state capitalism. Theoretical/ Academic Implications:We identify theoretical perspectives that help us better understand benefits and costs associated with various forms of state control over firms. We encourage future studies to examine how context-specific factors determine the effect of state control on corporate governance. Practitioner/ Policy Implications:Investors and policy-makers should consider under which conditions investing in state-affiliated firms generates superior returns. INTRODUCTIONOver a quarter of a century since the fall of the Berlin Wall, former communist regimes have transitioned to democratic or semi-democratic regimes, although the process of becoming market economies has advanced at different rates and directions across countries. Transition economies represent a large sub-category of emerging economies (Hoskisson, Eden, Lau, & Wright, 2000;Hoskisson, Wright, Filatotchev, & Peng, 2013). Given the 25 years since 1989, it is timely to review how means of state control have changed in these transition economies.While developed economies have seen a gradual demise of state-owned enterprises (SOEs) and there has been extensive privatization in emerging economies, state capitalism is a popular choice among transition economies (Wooldridge, 2012). Accordingly, we address the following research question: "Which forms of state control over corporations have emerged in countries that made a transition from centrally-planned to marked-based economies and what are their implications for corporate governance?" To address this question, we suggest a taxonomy of state control used to structure our literature review.We consider the transformation of state control in transition economies focusing on the emergence of contemporary forms of state capitalism following privatizations of the 1990s. Earlier reviews focused on privatization comparing performance of state-owned and privatized companies (Estrin & Wright, 1999;Megginson & Netter, 2001; Djankov & Murrell, 2002), but interactions between state and private sector have evolved and new forms of state control have emerged. Our motivation is driven by a lack of comprehensive reviews encompassing the evolution and variety of state control over firms and their governan...

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