Allocation of Decision Rights Between the Parent Company and Its Subsidiaries

Liu, Yuanyuan; Luo, Ting; Yue, Heng

doi:10.1177/0148558x16648032

Cited by 7 publications

(7 citation statements)

References 36 publications

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“…Liu et al . (2018) argue that decentralisation is favoured in taking account of managers' information advantages. However, decentralised control is a double‐edged sword.…”

Section: Institutional Background and Hypothesis Developmentmentioning

confidence: 99%

“…(2013) and Liu et al . (2018), which is a significant embodiment of decision‐making rights and can effectively reflect the delegation of the parent firm. In particular, we measure the concentration of personnel assigning power using the proportion of cash flow related to the compensation payment of the parent company in the consolidated statement.…”

Section: Data and Variable Constructionmentioning

confidence: 99%

“…Acemoglu et al (2007) highlight the role of diffusion of new technologies in the delegation structure. Liu et al (2018) argue that decentralisation is favoured in taking account of managers' information advantages. However, decentralised control is a double-edged sword.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…In SOEs' personnel control system, firm performance is still the basic rule for agent selection (Li and Zhou, 2005). To ensure the maximum use of existing resources and reduce losses due to poor information, decentralisation is generally favoured (Liu et al ., 2018). Anti‐corruption activities are highly associated with unexpected changes and increase the quantity of information (Cao et al ., 2018).…”

Section: Introductionmentioning

confidence: 99%

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Does corruption shape firm centralisation? Evidence from state‐owned enterprises in China

Kong

Zhu

Qin

2021

Accounting & Finance

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This paper investigates the effects of corruption on centralisation in state‐owned enterprises (SOEs). Based on a unique setting in China where both parent firms' and the whole business group’s financial statements are mandatorily disclosed, we construct a novel proxy of centralisation exploiting the allocation decision rights within business groups. We then introduce a quasi‐natural experiment (i.e., China’s anti‐corruption campaign) to present that the reduction of corruption significantly enhances the centralisation of SOEs. A plausible mechanism is that the anti‐corruption campaign reshapes firms' internal governance and operation. Our findings are particularly pronounced for SOEs with low levels of financing conditions and ownership concentration.

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“…Liu et al . (2018) argue that decentralisation is favoured in taking account of managers' information advantages. However, decentralised control is a double‐edged sword.…”

Section: Institutional Background and Hypothesis Developmentmentioning

confidence: 99%

Section: Data and Variable Constructionmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Does corruption shape firm centralisation? Evidence from state‐owned enterprises in China

Kong

Zhu

Qin

2021

Accounting & Finance

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“…Disproportionate attention: One of the manners in which value reduction happens is because of the inappropriate attention of the HQ to the strategic businesses. In this case, the parent company focuses more on new business units (Campbell et al, 1995b), relies inordinately on making money from old products (Goold, 1996b) and, in some cases, ignores the business units in need of help (Ambos and Schlegelmilch, 2007;Liu et al, 2016).…”

Section: Role Two: Value Reductionmentioning

confidence: 99%

Headquarters’ roles and interventions in subsidiaries: a systematic review

Fallah

Heidari

2020

RIBS

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Purpose This study aims to review the existing literature on corporate-level strategy to develop a conceptual framework of the headquarters’ roles as well as situational factors influencing them. Design/methodology/approach The systematic review is conducted. Accordingly, 598 studies (published from 1962–2018) were extracted from three databases (ProQuest, EBSCO and Web of Science). Then, after screening and ensuring the quality by the TAPUPAS checklist, 53 articles were systematically analyzed by manual coding method. Findings In total, 31 interventions in the form of four roles, namely, “value creation,” “value reduction,” “portfolio management“ and “loss prevent“ were identified for headquarters (HQ). Furthermore, four influencing situational factors distinguish “business characteristics,” “headquarters characteristics,” “corporate company characteristics” and “characteristic of the HQ-subsidiary relationships.” Originality/value The value of this research can be outlined as: mapping the cutting edge on the topic and systematizes the current knowledge; presenting an integrative, unique conceptual framework of HQs’ roles and influences, and particularly, of situational factors that determine the consequents of the interventions; and producing practical insights for corporate parent managers considering the situational factors influencing HQs’ roles and influences in managing their business portfolio successfully.

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