Institutional compatibility and the internationalization of Chinese SOEs: The moderating role of home subnational institutions

Li, Jing; Xia, Jun; Shapiro, Daniel; Lin, Zhouyu

doi:10.1016/j.jwb.2018.02.002

Cited by 104 publications

(69 citation statements)

References 64 publications

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“…However, Shukla and Cantwell [14] point out that although institutional distance does not play a strongly negative role in choosing an investment location, institutional affinity makes a location attractive to international firms. In a similar vein, Li et al [15] shed light on the importance of institutional compatibility by saying that compatibility between firm practices and home-country institutional conditions can positively affect a firm's outward FDI activities because it will be easier for MNEs to secure legitimacy in that situation.…”

Section: Theoretical Background and Hypotheses Developmentmentioning

confidence: 99%

FDI, Institutional Quality, and Bribery: An Empirical Examination in China

Ryu

2019

Sustainability

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This study attempts to identify the key factors inhibiting the bribery practices of multinational enterprise (MNE) subsidiaries directed at local managers in China. During the experiment, this study employs an institutional theory, identifies primary determinants on the phenomenon, and compares the main components between old versus young subsidiaries. Data were collected through a questionnaire survey and both regression and spearman rank order correlation analyses were used as statistical techniques. Through the analyses, we found that a cognitive pillar is a crucial element contributing to the inhibition of bribery practices, the enhancement of institutional quality, and the promotion of sustainable development in the emerging economy. We expect that the results will provide useful implications for MNE managers planning to invest in China and for policy makers enacting institutional environments.

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Section: Theoretical Background and Hypotheses Developmentmentioning

confidence: 99%

FDI, Institutional Quality, and Bribery: An Empirical Examination in China

Ryu

2019

Sustainability

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“…Lu et al [45] argue that Chinese government helps China's OFDI enter into a host country by supporting their institutions. Li et al [46] suggest that institutional incompatibility (thus lack of legitimacy) at home or abroad should reduce Chinese SOEs' OFDI activities. Luo et al [35] observe that competitive disadvantage of Chinese enterprises is offset by export and investment promotion policies which are economically imperative and institutionally complementary.…”

Section: Literature Reviewmentioning

confidence: 99%

Trade Agreements and Global Value Chains: New Evidence from China’s Belt and Road Initiative

et al. 2020

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This paper investigates the relationship between China’s trade agreements (TAs) and partner countries’ upgrade in global value chains (GVCs). We focus on the experience of China and relate China’s TAs with one belt and one road (OBOR) initiative. A structural equation model (SEM) is applied on a dataset including 216 countries and regions to identify the direct and indirect effects of China’s TAs and OBOR initiative on its export, outwards foreign direct investment (OFDI) and partner economy’ GVCs upgrade over the period 2010–2015. We find that China’s TA partner countries are more likely to be included in the OBOR initiative than those non-TA partner countries. The positive effects of China’s TAs and OBOR initiative on China’s export, outwards foreign direct investment (OFDI) and partner countries’ upgrade in GVCs differ across country groups at the different locations of GVCs. Both vertical and horizontal spillover effects exist in China’s TAs. Therefore, the partner countries at low end and middle of GVCs might benefit more from TAs with China than those richer countries at the high end of GVCs.

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“…However, the motivation for senior managers of SOEs to promote a SOE's CBM & A is not only to improve the economic performance of local governments but also to achieve political goals and social welfare goals at the national level [34]. Li et al [35] show that the incompatibility between China's political system and foreign political market system reduces the difficulty of Chinese SOEs in outbound investment and M&A activities. Secondary political factors in China, such as coercive measures, standardized management, and the imitation effect, offset the advantages brought by M&A.…”

Section: H1 Government Internationalization Subsidies Have a Positivmentioning

confidence: 99%

“…Direct government intervention is closely related to M&A costs [38]. Second, the government's indirect intervention is reflected in the government's intervention in enterprises' M&A through SOEs [35].…”

Section: H1 Government Internationalization Subsidies Have a Positivmentioning

confidence: 99%

The Cross-Border Mergers and Acquisitions of Local State-Owned Enterprises: The Role of Home Country Government Involvement

Bao

2020

Sustainability

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Existing literature tends to treat enterprises as a whole when measuring government intervention. However, in Chinese region-specific institutional development, ultimate control (i.e., local government) tends to control multiple enterprises. This paper considers the enterprises controlled by the same ultimate controller as a portfolio, which is used to measure government intervention by comparing the differences of the enterprises in the portfolio. This paper uses the data of Chinese listed local state-owned enterprises (LSOEs). and we assess whether local state ownership benefits or offsets LSOEs’ cross-border mergers and acquisitions (CBM & A) activities. We propose a new measurement of government intervention to explain the mechanisms through which government influences the cross-border mergers and acquisitions of local SOEs. The experimental results show that government intervention and region-specific marketization institutional development negatively moderate the effect of government internationalization subsidies and government intervention on CBM & A separately. However, government internationalization subsidies, government intervention, and region-specific marketization enhance the CBM & A effect of state ownership separately. This study explores the benefits of government involvement in local SOEs. The value of this paper is to provide a novel perspective, including the intermediary effect of government intervention and the market environment.

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Institutional compatibility and the internationalization of Chinese SOEs: The moderating role of home subnational institutions

Cited by 104 publications

References 64 publications

FDI, Institutional Quality, and Bribery: An Empirical Examination in China

FDI, Institutional Quality, and Bribery: An Empirical Examination in China

Trade Agreements and Global Value Chains: New Evidence from China’s Belt and Road Initiative

The Cross-Border Mergers and Acquisitions of Local State-Owned Enterprises: The Role of Home Country Government Involvement

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