Research on Competitive Neutrality of SOEs with Special Functions in China

Abstract

A Deviation from competitive neutrality is one of the main problems faced by Chinese state-owned enterprises. Based on the orientation of the classification reform of state-owned enterprises to all kinds of enterprises, we discuss the competitive neutrality of state-owned enterprises with special functions from the perspectives of enterprise policy burden and enterprise profits. The research herein shows that state-owned enterprises, as the main entities of policy burden, have undertaken social responsibilities such as helping the government to stabilize employment, which has caused problems such as creating redundant employees, reducing the efficiency of employees, and reducing the profits of enterprises. To make up for the loss of profits of enterprises that bear the policy burden, the government provides them with implicit guarantees, which makes it easier for them to obtain bank loans and other external factors, and the asset–liability ratio of enterprises increases, which comprises the problem concerning a deviation from competitive neutrality that the United States and other western countries have surmised. However, the empirical study found that the deviation from competitive neutrality in financing actually reduced the profits of enterprises, that is, the state-owned enterprises faced a certain competitive disadvantage. Based on the research conclusion herein, this paper puts forward some enlightening findings on state-owned enterprise reform.

Promote or inhibit? The effect of the whole chain development of intellectual property on manufacturing firm performance

“…The results of this paper confirm this hypothesis, which has also been verified in many studies. It shows that non-state manufacturing firms have the advantages of lighter policy burden and better incentive system than state-owned manufacturing firms, and managers of non-state manufacturing firms are more willing to innovate and carry out IPR activities, so non-state manufacturing firms are better at finding opportunities to develop themselves in WCDIP environment (Low, 2009;Tang and Sun, 2014;Huang and Li, 2019;Duan and Kang, 2022). H4 indicates that WCDIP is more beneficial to the performance of medium-and high-technology manufacturing firms compared to low-tech manufacturing firms.…”

“…State-owned manufacturing firms and non-state-owned manufacturing firms have heterogeneity in the relationship between WCDIP and firm performance because of the special institutional background, and the heterogeneity is manifested in political attributes and firm governance. On the one hand, the heavy policy burden may cause state-owned manufacturing firms to violate their business objectives and have a relatively low willingness to engage in innovative activities with high risks and uncertain returns (Tang and Sun, 2014;Duan and Kang, 2022), while non-state-owned manufacturing firms have a lighter policy burden, and are brave enough to engage in technological innovation and IPR activities to achieve high returns, so they rely more on WCDIP. On the other hand, in terms of firm governance, managers of state-owned manufacturing firms are not the actual decision-makers, and there is a mismatch between risk-taking and benefits (Chen L. et al, 2022).…”