Duopoly, mixed ownership, and the optimal proportion of employee stocks in state‐owned enterprises in China

Chen, Junlong; Wang, Mudi; Gao, Yaxin; Long, Yuncheng

doi:10.1002/mde.3025

Cited by 11 publications

(7 citation statements)

References 31 publications

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“…If only one firm adopts CSR, the utility functions of two enterprises are U 1 = π 1 + βCS and U 2 = π 2 . Social welfare is defined as SW = π 1 + π 2 + CS (Chen, Wang, &Chu, 2020), where

italicCS = \frac{{q_{1}}^{2} + {q_{2}}^{2} + 2 q_{1} q_{2}}{2}

(Chen, Liu, Mo, & Xu, 2019; Chen, Tang, & Liu, 2019; Chen, Wang, Gao, & Long, 2019).…”

Section: The Modelmentioning

confidence: 99%

The optimal level of corporate social responsibility based on the duopoly model

et al. 2020

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This paper constructs a duopoly model considering corporate social responsibility (CSR) and market's sensitivity to CSR (e) and analyzes the equilibrium results, the condition of CSR implementation and the optimal CSR level (β *) of Model CC (two enterprises implement CSR) and Model CN (only one enterprise implements CSR). The results show that β * is affected by competitors and e. e, marginal cost (c) and cost difference affect the equilibrium results and the comparative results. Reducing c and improving e can promote social welfare. Consumer surplus under Model CC is highest. CSR has a negative effect on social welfare under certain conditions.

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“…If only one firm adopts CSR, the utility functions of two enterprises are U 1 = π 1 + βCS and U 2 = π 2 . Social welfare is defined as SW = π 1 + π 2 + CS (Chen, Wang, &Chu, 2020), where

italicCS = \frac{{q_{1}}^{2} + {q_{2}}^{2} + 2 q_{1} q_{2}}{2}

(Chen, Liu, Mo, & Xu, 2019; Chen, Tang, & Liu, 2019; Chen, Wang, Gao, & Long, 2019).…”

Section: The Modelmentioning

confidence: 99%

The optimal level of corporate social responsibility based on the duopoly model

et al. 2020

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“…The Chinese Government took the first step towards modern corporate governance mechanism by creating a new government body, i.e. the China Securities Regulatory Commission (CSRC) (Jiang and Kim, 2015; Chen et al , 2019). The Company law and Securities law were amended to give greater emphasis to corporate governance, and it is an important starting point in the evolution of China’s corporate governance reforms.…”

Section: Development Of Hypothesismentioning

confidence: 99%

Does board independence enhance firm value of state-owned enterprises? Evidence from India and China

Thenmozhi

Sasidharan

2020

EBR

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Purpose This study aims to examine the effectiveness of governance in state-owned enterprises (SOEs) and explores if board independence enhances the firm value of SOEs in India and China. The study further explores the moderation impact of promoter ownership in enhancing firm value. Design/methodology/approach The study is confined to government-owned enterprises in India and China and is based on a sample of 53 central government-owned firms listed in National Stock Exchange of India and 110 state-owned firms listed in Shanghai Stock Exchange of China for the period 2010–2017. A fixed-effect panel regression analysis has been used to examine the effect of board independence on firm value. Findings The study found that board independence adds value to the SOEs in India and China and the presence of independent directors (IDs) in the board of SOEs act as better monitors of performance to protect the interest of minority shareholders. Probably, they minimize agency conflict and provide resources to the firm and management. The greater the government shareholdings, the board independence further enhances value of SOEs in India and China. Practical implications Compliance with guidelines on IDs in SOEs serves as an effective corporate governance mechanism and the presence of IDs can signal better firm performance. The government promoters align with the IDs in better monitoring of SOE performance. Originality/value The study is unique and contributes to the literature by examining the impact of board independence on firm value in the context of SOEs in India and China and also provides insight on the effect of promoter ownership on the effectiveness on board independence.

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“…They participate in a Cournot competition. The market demand for upstream products can be expressed as (Chen, Wang, Gao & Long, 2019;Chen, Liu, Mo & Xu, 2019;Lee & Wang, 2018), where q1 and q2 are the product outputs of Enterprises 1 and 2, respectively, > 0 is a constant, and the subscript means the upstream industry. The profit of each upstream enterprise can be described as = − , = 1,2.…”

Section: The Modelmentioning

confidence: 99%

Capacity Choice and Government Regulation in a Vertical Industry

Chen

Wang

Liu

2020

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This paper sets up an industry competition model consisting of two upstream enterprises and two downstream enterprises. Then we rely on the model to explore how non-regulation and different regulatory policies (maximizing the total profits of the upstream enterprises, the social welfare of the upstream industry or the overall social welfare) affect the following factors: the excess capacity, enterprise profits, consumer surpluses, social welfare in the upstream and downstream enterprises and the overall social welfare. The following conclusions are drawn from our research. First, whether and how the government regulates the capacity choice greatly affect the equilibrium outcomes, as well as the welfare distribution among the upstream enterprises, downstream enterprises, and consumers. The specific effects are dependent on market demand and enterprise cost. Second, the government should formulate its regulatory policies on capacity choice based on the overall social welfare of the entire supply chain. If the government aims to maximize the profits of the upstream enterprises, the social welfare of the downstream industry will be negatively affected. Third, excess capacity does not necessarily suppress social welfare. Under certain conditions, the worst scenario of excess capacity may occur under the pursuit of the maximal overall social welfare. Excess capacity may arise from various causes, rather than market competition or government regulation alone. Excess capacity cannot be attributed solely to government failure. These conclusions have some significance for optimizing capacity regulation policies.

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Duopoly, mixed ownership, and the optimal proportion of employee stocks in state‐owned enterprises in China

Cited by 11 publications

References 31 publications

The optimal level of corporate social responsibility based on the duopoly model

The optimal level of corporate social responsibility based on the duopoly model

Does board independence enhance firm value of state-owned enterprises? Evidence from India and China

Capacity Choice and Government Regulation in a Vertical Industry

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